U.S. regulators again declined to approve its drug Thelin as a treatment for a life-threatening lung disease. Encysive (ENCY) said it may have to cut costs and staff.

The company’s shares took at 50% haircut, and fell as low at $1.85. The company’s 52-week high is $7.21. Encysive’s market cap has dropped to $154 million.

The event highlight the dangers of investing in tiny "one trick pony" biopharma companies. In Q1, the company had sales of $5.4 million and an operating loss of $28.7 million.

With current cash on hand at $52.7 million and a large debt load, the company does not appear to have much time to improve its future prospects.

Douglas A. McIntyre