NEW YORK (TheStreet) -- Zogenix (ZGNX) - Get Report shares are down $26.35% to $1.23 in trading on Wednesday after the pharmaceutical company announced that it was selling its Zohydro business to Pernix Therapeutics (PTX) - Get Report for $100 million plus regulatory and sales milestones that could push the deal to $283.5 million.

The move is a cost cutting measure for the San Diego-based company that "significantly reduces operating expenses, eliminates all R&D expenses related to ongoing abuse-deterrent formulations, and further enhances the company's financial strength with non-dilutive capital," according to a statement released by the company.

Zogenix announced the sale of the painkiller yesterday after reporting a fourth quarter net loss that was wider than analysts were anticipating. The company lost 13 cents per diluted share in the period while analysts were expecting the company to lose 11 cents per share during the period.

The company reported revenue of $14.9 million during the quarter ahead of Zacks analysts' $11.5 million estimates.

TheStreet Ratings team rates ZOGENIX INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate ZOGENIX INC (ZGNX) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• You can view the full analysis from the report here: ZGNX Ratings Report

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