Bristol-Myers Squibb ($BMY) is calling it quits on a depression drug it was working on with Albany Molecular Research ($AMRI), and investors sent the contractor's shares into a plunge as its CEO preached patience.
The pair was developing BMS-820836, a triple reuptake inhibitor, but halted two Phase II studies when the drug failed to best Eli Lilly's ($LLY) Cymbalta, which comes off patent this year. AMRI licensed the compound to Bristol-Myers back in 2005, and while the ongoing partnership has padded revenue ever since, CEO Thomas D'Ambra said the treatment's failure won't affect its forecasts for the rest of the year.
But that apparently wasn't enough reassurance for investors, and AMRI's shares slipped as much as 22% on Monday before creeping back to around $11.50 by midday Tuesday, still about 11% below their prefailure price.
Still, AMRI is sticking with its plan to grow revenue up to 12% in 2013, expecting as much as $213 million thanks to a fast-improving large-scale manufacturing segment and a few regulatory victories in the U.S. and India. Last quarter, the company took a $2.2 million loss as spiking costs negated a 19% jump in revenue.
The original deal between the two covered four compounds, D'Ambra told Reuters, and BMS-820836 was the furthest along, resulting in $15.5 million in milestones since 2005.