Metabasis stock tanks on double dose of bad news

Metabasis Therapeutics announced a pair of setbacks on Tuesday, saying that Schering-Plough is pulling out of a collaboration to develop a new therapy for hepatitis B and that an experimental diabetes drug failed in a clinical trial. The double dose of bitter news sent its stock price into the tank, with shares losing more than half their value. Schering-Plough is terminating a deal to commercialize pradefovir and will return all rights to the drug after researchers unveiled data that linked the therapy to a heightened risk of cancer in animal studies. Separately, the company said that a Phase IIb trial of its CS-917 therapy failed to raise the glucose level of patients with type 2 diabetes. Officials with Metabasis said they were surprised and disappointed, but hoped to continue development.

- see the release
- read the CNN report
- and here's the AP report

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