Here's Why Progenics Pharmaceuticals, Inc. Lost Ground Today

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What happened

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Despite upbeat recent developments, shares of Progenics Pharmaceuticals, Inc. (NASDAQ: PGNX) fell 15.3% during Wednesday's session. The biotech reported solid progress with clinical-stage candidates, but a steep drop in Relistor revenue weighed on the stock.

So what 

An injectable form of Progenics' Relistor for the treatment of opioid-induced constipation has been available since 2008. Investors expected a tablet version approved last July to lead to significantly higher sales and are punishing the stock because the revenue hasn't materialized.

Second-quarter royalty revenue came in at just $2.6 million. Although that was 9.3% higher than royalty revenue reported during the previous-year period, investors were looking for more.

During the second quarter of 2016, the company recorded a $6.1 million antibody technology licensing payment from Germany's Bayer. With very little licensing revenue to speak of during the second quarter this year, the company reported a 67% year-to-year total revenue slide that didn't sit well with the market.

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Now what

The good news is that Progenics' marketing partner, Valeant Pharmaceuticals, reported that Relistor tablet prescriptions were 68% higher during the second quarter than the first three months of the year. Relistor tablet sales might not reach the $1 billion target Valeant set last year, but they're clearly on the rise despite competition from AstraZeneca's Movantik.

Progenics investors would do well to stay focused on Progenics' clinical stage pipeline. The company expects to complete a rolling submission for Azedra later this month. The drug succeeded in the pivotal trial supporting the application, and the FDA is expected to grant it a speedy review. That means the company could have a second drug on pharmacy shelves by the end of the year.

If approved, Azedra is expected to generate between $200 million and $300 million in peak annual sales. With a modest $360 million market cap after today's beating, a successful launch for this candidate alone could make this stock a multibagger over the long run.

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Cory Renauer has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Valeant Pharmaceuticals. The Motley Fool has a disclosure policy.