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news.Shares in Praecis Pharmaceuticals fell around 30% after the company failed in its attempts to sell the rights to its Plenaxis prostate cancer drug and announced that it will now withdraw the therapy from the market.
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Praecis will work with the FDA to discontinue the limited distribution of the product in the United States as soon as possible and will no longer pursue commercialization of Plenaxis outside the United States.
Analysts had expected the company to get over $10 million from a licensing deal for the product, but Praecis will now incur charges around $7.5 million relating to the drug withdrawal.
The US-based biopharmaceutical company said that it currently estimates that it will record a non-cash impairment charge of approximately $3.6 million in the second quarter of 2006 related to the remaining value of capitalized Plenaxis inventory and equipment, and an additional charge in the second quarter of approximately $3.9 million related to the present value of its remaining commitments under its manufacturing and supply agreements for the drug.
The company said that it currently believes that its resources are sufficient to sustain its activities at current levels until the end of 2007, but that it intends to actively explore financing alternatives, as well as other strategic options which may be available.