Onyx Pharmaceuticals Inc.'s (NASDAQ ONXX) shares slid 30 percent Monday, the most since October 2004, after the company and partner Bayer AG reported that the cancer drug Nexavar failed to help save lives of patients with advanced melanoma.
The shares fell $5.32 to $12.18 in Nasdaq Stock Market composite trading Monday, after earlier sinking to $11.96. The last time the Emeryville-based company's shares dropped more was on Oct. 25, 2004, when they fell 33 percent.
Nexavar, Onyx's lead product, won U.S. regulatory approval last December for kidney cancer.
Bayer, based in Leverkusen, Germany, previously said Nexavar may bring in more than $1 billion in annual sales if the drug is approved to treat a range of malignancies. The companies are also testing the drug on patients with liver and lung cancers.
Investors had expected robust financial returns because of the size of the skin-cancer market, which is larger than that for kidney cancer, said Jim Reddoch, an analyst with Friedman Billings Ramsey & Co. in Arlington, Va.
"People were holding out for statistical significance," Reddoch said Monday. "There was no evidence that the drug was doing anything on top of the chemotherapy regimen."
Monday's news might limit the number of new uses sought for Nexavar, said Reddoch, who lowered worldwide sales estimates through 2010 to $551 million from $728 million.
The companies plan to continue research on the drug for melanoma even after Monday's results, Arthur Higgins, chief executive officer of Bayer HealthCare, said on a conference call with analysts and investors. Bayer doesn't expect the results to hurt recruitment to Nexavar trials, Higgins said.
Nexavar targets proteins involved in both tumor cell production and the formation of new blood vessels that support cancer cell growth, Onyx's Web site said.
The shares fell $5.32 to $12.18 in Nasdaq Stock Market composite trading Monday, after earlier sinking to $11.96. The last time the Emeryville-based company's shares dropped more was on Oct. 25, 2004, when they fell 33 percent.
Nexavar, Onyx's lead product, won U.S. regulatory approval last December for kidney cancer.
Bayer, based in Leverkusen, Germany, previously said Nexavar may bring in more than $1 billion in annual sales if the drug is approved to treat a range of malignancies. The companies are also testing the drug on patients with liver and lung cancers.
Investors had expected robust financial returns because of the size of the skin-cancer market, which is larger than that for kidney cancer, said Jim Reddoch, an analyst with Friedman Billings Ramsey & Co. in Arlington, Va.
"People were holding out for statistical significance," Reddoch said Monday. "There was no evidence that the drug was doing anything on top of the chemotherapy regimen."
Monday's news might limit the number of new uses sought for Nexavar, said Reddoch, who lowered worldwide sales estimates through 2010 to $551 million from $728 million.
The companies plan to continue research on the drug for melanoma even after Monday's results, Arthur Higgins, chief executive officer of Bayer HealthCare, said on a conference call with analysts and investors. Bayer doesn't expect the results to hurt recruitment to Nexavar trials, Higgins said.
Nexavar targets proteins involved in both tumor cell production and the formation of new blood vessels that support cancer cell growth, Onyx's Web site said.
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