Nabi Shares Plunge After Smoke-Cessation Drug Shown Ineffective in Study

Nabi Biopharmaceuticals (NABI), the developer of a vaccine for nicotine addiction, plunged to a 13- year low in Nasdaq trading after the treatment for smoking cessation failed to show effectiveness.

Nabi, based in Rockville, Maryland, dropped $1.75, or 69 percent, to $1.75 at 12:53 p.m. New York time in Nasdaq Stock Market trading, after earlier declining to $1.55, the lowest price since October 1998.

The drug, NicVAX, is an experimental vaccine aimed at aiding smoking cessation and preventing relapses in recovering smokers. NicVAX didn’t help smokers quit in the first of two Phase 3 clinical trials designed to evaluate effectiveness, Nabi said today in a statement.

“NicVAX is dead as currently configured,” Jeffrey Cohen, senior analyst at CK Cooper & Co. in Irvine, California, said in an interview. “Nabi’s recovery is somewhat unrealistic.”

Cohen has a “buy” rating that is under review, he said. He doesn’t own the stock.

Subjects using NicVAX quit smoking at a similar rate of 11 percent compared with subjects who received a placebo treatment, the company said. The study was part of the last of three stages of clinical trials generally required for U.S. regulatory approval.

Nabi is currently conducting a second round of Phase 3 trials that will analyze today’s results, President and Chief Executive Officer Raafat Fahim said in a webcast.

“We hope that our analysis over the next little while will shed light on the reasons for such surprising results,” Fahim said. “The trial was very well conducted.”

Nabi formed an exclusive option and license agreement for NicVAX with London-based GlaxoSmithKline Plc (GSK) in March 2010 that entitled Nabi to receive $20 million upon the successful completion of Phase 3 trials and up to $460 million in potential option fees.

To contact the reporter on this story: Oliver Renick in New York at orenick@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.