Miravant Shares Plunge on Drug’s Failed Study

Miravant Medical Technologies shares sank 75% after the company said its leading product, a drug to treat a major cause of blindness, failed to work in a late-stage study.

Santa Barbara-based Miravant is an unprofitable company that specializes in light-activated drugs and has no other products ready for the market. Its shares dropped $7.31 to $2.44 in Nasdaq trading of 13.6 million shares, about 140 times the three-month daily average. Miravant’s decline was the biggest on U.S. markets.

“It’s a major setback for them--this was their most advanced product,” said Fariba Ghodsian, an analyst at Roth Capital Partners, who holds no Miravant shares. She cut her rating on the stock to “neutral” from “strong buy” on the news.

The company will work with its partner, Pharmacia Corp., to determine whether to continue to develop the drug, known as SnET2, said Miravant spokeswoman Laurens Lichty.