BOULDER, Colo. (AP) _ Hauser Chemical Research Inc.'s stock plunged Friday after executives disclosed Bristol-Myers Squibb Co. will not extend its contract to buy Hauser's taxol, a key cancer-fighting ingredient.

In heavy over-the-counter trading, Hauser's share price was slashed by more than half, tumbling $7.87 1/2 to $6.62 1/2 .

Hauser had a $100 million, three-year contract to supply Bristol-Myers with taxol, which is derived from the bark of the Pacific yew tree.

Bristol-Myers' decision deals Boulder-based firm a serious blow, since Hauser has derived roughly 90 percent of its revenues from the contract, which remains in force through Aug. 14, 1994.

William Paukert, Hauser's chief financial officer, has declined to speculate whether there might be layoffs next year.

The company had anticipated that taxol revenues would decline eventually as new methods for producing the anti-cancer drug emerged. But Paukert said a decision by Bristol-Myers to go with an Italian company producing taxol through semi-synthesis caught Hauser officials off guard.

''I don't think anybody really expected they would have the quantities to satisfy themselves in the two-year time frame,'' Paukert said.