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Alimera Sciences (ALIM) -



>>> These 2 Biotechs Got Crushed



By David Williamson
November 12, 2011


http://www.fool.com/investing/high-growth/2011/11/12/these-2-biotechs-got-crushed.aspx



On a day when the Dow Jones Industrial Average (INDEX: ^DJI ) surged 260 points as the European debt drama continues to unfold, significantly larger moves happened in the health-care sector. Friday's big headline: A pair of biotech companies got crushed after receiving a complete response letter (CRL) from the FDA.

The biggest mover was Alimera Sciences (Nasdaq: ALIM ) . Shares collapsed 73% as the company's flagship drug candidate, Iluvien, was rejected by the FDA. pSivida (Nasdaq: PSDV ) , which licensed the technology to Alimera, lost nearly 50% of its value.

This is the second CRL Iluvien has received, although analysts had expected a better result on its second go-around. The FDA isn't convinced that the benefits of the treatment for diabetic macular edema outweigh the risks and is requiring two additional trials. Alimera doesn't have the money to run those tests, which would probably result in additional debt, dilution, or both. A buyout could be possible, but it's a stretch to think other drugmakers are licking their chops over a twice-rejected treatment. So investors shouldn't count on Pfizer (NYSE: PFE ) , which is working with pSivida on its own eye implant, to ride in on a white horse.

Alimera's next move is to…


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