The company's shares traded at $1.70, down 47 cents, or 22 percent, Monday afternoon on the Nasdaq Stock Market. The stock's 52-week low of $1.65 was set Nov. 15 and a 52-week high of $7.88 was set last December.
Praecis' lead product, Plenaxis, which treats a specific form of prostate cancer that can't be treated with hormone therapy, hasn't made inroads with physicians, the company said.
The product is key for Praecis since it's the only one of its drugs approved by the Food and Drug Administration.
Doctors are hesitant to use the drug because they're unclear what the appropriate patient population is, the company said. In addition, they're concerned about the reimbursement policy, especially given the changing pharmaceutical reimbursement for 2005 because of the recent Medicare reform.
As a result, Praecis, which is based in Waltham, Mass, expects fourth-quarter revenue to be below the $1.1 million in sales it recorded in the third quarter.
The company, however, still expects to end the year with cash and cash equivalents of at least $75 million. It previously forecast profitability by 2006, but a spokesman was unavailable to comment on whether that forecast still stood.
Plenaxis' difficult launch isn't a surprise. In an Oct. 29 research note issued after the company's third-quarter report, CIBC World Markets analyst Matt Geller said the drug faced an ``uphill battle.''
The restricted labeling makes it difficult to achieve a substantial piece of the prostate cancer market. The company needs to get approval from a pipeline product for its stock to make any significant gains, Geller said.
Plenaxis was approved in November 2003.
Geller doesn't own Praecis, and CIBC doesn't have an investment banking relationship with the company