Nabi shares in meltdown after NicVAX flunks Ph3

Shares of Nabi Biopharmaceuticals ($NABI) went into a meltdown this morning after the developer announced that the first of two late-stage studies for its experimental nicotine addiction vaccine failed to hit its primary endpoint. And the troubling news is spurring management to explore "any and all appropriate alternative actions," signaling potentially big changes for the Rockville, MD-based developer.

Researchers said that 11% of the patients taking NicVAX quit smoking after 16 weeks of treatment, which was similar to the cessation rate among patients given a placebo. And the news caused a rout among its investors as the stock plunged 70%.

"We are clearly surprised and deeply disappointed with the results of this first NicVAX Phase III trial," said Nabi CEO Raafat Fahim. "We are in the process of assessing the reasons for these unexpected data, as we await the results of the second Phase III trial. Data from this second trial may provide clues that could help explain the disappointing results from the first trial. In the meantime, the board of directors is actively evaluating any and all appropriate strategic alternative actions to preserve shareholder value, while management is working to further control the operational expenses of the company."

Almost two years ago GlaxoSmithKline signed up to partner on NicVAX, providing $40 million upfront along with more than a half billion dollars in milestones to gain an option on a worldwide pact and the chance to develop the next-gen treatments that were expected to follow.

- here's the Nabi release