NEW YORK -- The tiny biotech firm EntreMed will press ahead with an experimental drug that briefly sparked hope for a cancer cure, but investors sliced the company's value in half Wednesday after Bristol-Myers quit plans to pay for human testing.
Analysts said late Tuesday's announcement by Bristol-Myers Squibb, the world's largest maker of cancer drugs, cast serious doubt on angiostatin's potential as a treatment for people with cancer.
They were also dubious about whether the Rockville, Md.-based company has the scientific and financial capability to develop the drug by itself.
"Bristol is the leading drug company in cancer in the world; if they have no interest in the drug, what does that say?," said Carl Gordon, an analyst with OrbiMed Advisors.
Shares of EntreMed lost nearly half their value Wednesday on the Nasdaq Stock Market, falling $11.62 1/2 to $12.87 1/2 . That's less than a dollar above where the stock was on the morning of May 4, the day when angiostatin was featured in a front-page article in The New York Times and the stock soared as high as $85.
EntreMed officials say they can survive without Bristol-Myers and move ahead with human testing of both drugs. The company has $32 million in cash, and no long-term debt. But analysts said it would take $100 million or more to develop such a drug.
Bristol-Myers had spent tens of millions of dollars researching angiostatin, a naturally occurring human protein, after obtaining development rights from EntreMed in 1995.
Harvard University scientist Judah Folkman gained worldwide attention last spring when he reported that angiostatin, combined with a second EntreMed compound called endostatin, shrunk tumors in rats by cutting off their blood supply.
But in the ensuing months, other scientists raised questions about the discovery, saying they could not duplicate the results of Mr. Folkman's research.
Even Bristol-Myers reported that it was having trouble producing angiostatin in the laboratory and demonstrating that the drug could destroy cancer cells inside rats.
Bristol-Myers now plans to focus on other anti-cancer agents, said spokeswoman Peggy Ballman. The company retains development and marketing rights for angiostatin.