Just a couple of weeks ago I was optimistic about Anesiva and the rollout of Zingo, a quick-acting pain killing system for children getting IV punctures. I was able to verify that several hospitals were using the treatment and that patient response was good.
Yesterday, buried in a press announcement about Adlea, an Anesiva's analgesic under development, Anesiva said they would discontinue Zingo. Here's what they said:
"Anesiva has determined that it will cease further commitments to support Zingo commercialization as a result of continued manufacturing challenges and the need to recall product in the field due to a potential non-safety related shelf life issue from a lot of unreleased product. Anesiva plans to seek a device-oriented partner for this asset. The company will also seek to license rights to the underlying drug delivery technology to third parties for use with other medications."
Well, sometimes things go wrong, that is why my investment motto is "keep diversified." However, sometimes management is not being entirely honest with investors or analysts (and there are cases where they have even tried lying to the FDA).
On May 8, 2008 management said that manufacturing and packaging issues were resolved [See my Anesiva (ANSV) Analyst Conference Summary for Q2 2008] . As far as I know, yesterday was the first time the issue was raised since that time.
Anesiva stock is virtually worthless today, but that might be a mistake. Adlea is also a promissing therapy. However, now I don't trust management. They should have kept investors informed of problems as they happened. True, that might have knocked the stock price down earlier, but at least people would be investing, or selling, based on good information and management might have kept investors' trust.
Zingo, too, should be worth something in the hands of competent managers. Now it can be bought for a song, or maybe its competitors will just arrange for it to die.
Now more than ever ...
Keep diversified. And be more cautious about development stage drug companies, even if they have an FDA approval for a therapy.