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Idenix Pharma skids after hepatitis drug delay

NEW YORK (AP) -- Shares of Idenix Pharmaceuticals Inc. tumbled Friday after the Food and Drug Administration delayed human testing of the company's hepatitis C drug IDX20963.

THE SPARK: After the markets closed on Thursday, Idenix said the FDA wants more safety data on IDX20963 before it will allow the company to begin clinical trials. The company did not say how long it might take to satisfy the FDA's concerns.

THE BIG PICTURE: The Cambridge, Mass., company does not have any approved products. Idenix is running mid-stage clinical trials of another hepatitis C drug, IDX719, and is running preclinical trials of other potential drugs.

Hepatitis C is a chronic infection that can cause liver damage, cirrhosis, liver failure, or cancer. The FDA approved the two new drugs for the disease in 2011, but a slew of companies are researching newer treatments that could have higher cure rates and fewer side effects. The market for the disease is also expected to grow as the U.S. population ages and more cases are diagnosed.

THE ANALYSIS: JPMorgan analyst Geoff Meacham downgraded Idenix shares to "Neutral" from "Overweight," and cut his price target to $5 per share from $13. He said the delays could fall further behind Gilead Sciences Inc. and other competitors because of the delay. He said the main problem isn't just the delay for IDX20963 itself: the company was planning to test a combination of that drug and IDX719. It can't do that until the FDA's safety concerns are addressed.

"Idenix will need its wholly owned combination of IDX-719 and IDX20963 to be competitive," he said.

SHARE ACTION: Shares of Idenix dropped $1.63, or 31.8 percent, to $3.50 in afternoon trading. The stock had advanced 48 percent since May 1.