This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Torpid Outlook Knocks NitroMed

NitroMed (NTMD) 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.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs