Sweden’s Oncopeptides Nosedives After U.S. Treatment Withdrawal

(Bloomberg) -- Shares of Swedish biotech firm Oncopeptides AB plummeted for a second day as analysts downgraded the stock in the wake of its decision to withdraw a key anti-cancer treatment from the U.S. market.

The share price tumbled as much 40% when trading started in Stockholm on Monday, extending losses from the final session of last week when it closed 77% down. The severe moves were triggered by a decision to shelve Pepaxto after the U.S. Food and Drug Administration said the phase 3 OCEAN study didn’t meet the criteria of a confirmatory study.

Analysts at Kempen said in a note that Oncopeptides was “trying to stay afloat” and placed their rating “under review” while they wait for the outcome of a strategic assessment. DNB analysts meanwhile slashed their target price to 5 kronor per share from 200 kronor and cut the recommendation to sell from buy.

“We believe it will most likely also terminate most -- if not all -- ongoing clinical trials for Pepaxto globally,” DNB’s Patrik Ling said in a research note. “This outcome is much worse than we expected.”

Alongside the announced withdrawal, Oncopeptides said it would scrap its sales and marketing operations in Europe and the U.S. It “will immediately refocus the company and return to being a Sweden-based R&D company,” according to a statement on Friday.

A spokesperson for the company didn’t immediately respond to an email seeking comment on Monday.

The share price fall has wiped off about 1.8 billion Swedish kronor ($210 million) from the company’s market capitalization over two days, cutting its value to about 311 million kronor.

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