reported first-quarter results that didn't meet Wall Street's expectations, and it said full-year sales would be well below the consensus estimate, sinking the drugmaker's shares.
By late morning, the stock was down $2.21, or 25.7%, to $6.40. The stock fell as low as $6.33, a 52-week low. Trading volume was triple the average daily volume of 701,000 shares for the past three months.
NitroMed, based in Lexington, Mass., makes BiDil, a congestive heart failure drug for African-Americans. BiDil is the first medication approved by the Food and Drug Administration for a specific ethnic group. BiDil reached the market in July 2005.
However, BiDil's sales have been beset by
an assortment of problems
, including the reluctance by many managed-care organizations to provide the drug with low out-of-pocket charges for their clients.
In addition, the company's hiring of representatives on a contract basis proved ineffective, and NitroMed is hiring its own sales force. The sales-force transition will be completed by the end of the month.
The reimbursement and sales problems spilled over into the first-quarter results, as NitroMed recorded a loss of $25.9 million, or 75 cents a share, on sales of $2.32 million. Analysts polled by Thomson First Call had expected a loss of 68 cents a share and sales of $5 million. NitroMed didn't have any product sales in the year-ago quarter.
The company also predicted that full-year sales would be $20 million, less than half of the $44.4 million consensus forecast. Recent prescription data suggest that BiDil "is gaining traction," Argeris Karabelas, NitroMed's chairman and interim CEO, told analysts during a telephone conference call.
First-quarter operating expenses were higher year over year partly because of the launch of BiDil. However, NitroMed also had $2 million in restructuring charges after discontinuing many of its research projects and firing 30% of its staff. The latest first quarter also included $1.7 million in stock-based compensation expenses.