Targanta shares dive 82% after drug is rejected

Targanta's Mark Leuchtenberger (right) is disappointed by the advisers' opinion. (Wendy Maeda/Globe Staff/File 2007)

Shares of Targanta Therapeutics Corp. plummeted 82 percent yesterday, a day after the Cambridge biotechnology company failed to convince a federal advisory panel that its key product, an experimental antibiotic, should be approved.

The Food and Drug Administration panel narrowly decided Wednesday that the drug, called oritavancin, hasn't been proven to be safe and effective as a treatment for complicated skin and skin structure infections. Some panelists complained that Targanta's two patient studies were conducted in 1998 and 2003, before the most virulent strains of methicillin-resistant Staphylococcus aureus, known as MRSA, became common, raising doubts about the usefulness of the drug today.

The 10-to-8 vote raises the possibility that the FDA could require Targanta to complete additional studies before approving the drug, delaying Targanta's ability to start generating revenue. Though Wednesday's ruling isn't binding, the FDA normally follows the recommendations of its advisory panels.

Shares dropped $6.37 to $1.38, reducing Targanta's stock market value to less than $30 million. Targanta doesn't have any other drugs on the market.

Mark Leuchtenberger, the company's chief executive, told analysts yesterday he was disappointed by the advisers' "mixed" opinion.

If approved, the drug would compete with several existing antibiotics, including one from Cubist Pharmaceuticals Inc., based in Lexington. Targanta has 100 employees, including 30 in Cambridge.

Todd Wallack can be reached at twallack@globe.com. Material from Globe wire services was used in this report.