Targanta shares drop on negative FDA panel vote

Shares of Targanta Therapeutics Corp. plunged today, a day after a panel of government experts voted against the benefits of the company's antibiotic.

Yesterday the Food and Drug Administration's panel of infection experts voted 10 to 8 against the overall safety and effectiveness of the company's injectable drug, called oritavancin.

Shares of the Cambridge.-based company plummeted $6.30, or 81 percent, to $1.45 in midafternoon trading on the Nasdaq Stock Market. The panel's negative review came as a surprise to investors because FDA briefing documents published ahead of the meeting seemed favorable to the company's application.

Lazard Capital Markets analyst Wendy Marx downgraded Targanta shares to "hold" from "buy," saying the panel rejection "coupled with the increasing conservatism at the FDA is too great a hurdle to surmount."

Marx wrote that the FDA would likely decline to approve Targanta's drug and ask the company to conduct an additional patient study. The agency is scheduled to make a decision on the application by Dec. 8.

Panelists at yesterday's meeting complained that Targanta's two patient studies were conducted between 1998 and 2003, before the most virulent strains of staph bacteria became a real problem.

"People want an effective drug, but we just haven't seen enough evidence here with regard to the contemporary problem," said Dr. Barth Reller, a professor at Duke University Medical Center, who chaired the panel. "The consistent message is we need more evidence to be comfortable on the question of the effectiveness of this drug."

Targanta chief executive Mark Leuchtenberger told reporters after the meeting that the company would continue working with FDA to address questions raised by its experts.

"We're disappointed by what we view as a split decision. It certainly makes the road forward steep," Leuchtenberger said.

Since 2005, sales of new antibiotics that target superbugs have grown 20 percent to $1 billion last year, according to industry figures. Existing drugs on the market include Pfizer Inc.'s Zyvox and Cubist Pharmaceuticals Inc.'s Cubicin. (AP)