BOSTON (TheStreet) -- China Sky One Medical (CSKI) was one of several stocks trading below $10 and poised to move on above-average volume Tuesday after the Chinese drug company lowered its full-year guidance and announced the resignation of its CFO.
, which earlier this year was forced to restate 2009 financials due to an error in accounting for warrants the company issued as part of a private placement in January 2008, said it now expects adjusted earnings of $26 million to $31 million in fiscal 2010 on revenue of between $128 million and $136 million. Its prior outlook was for a profit, excluding the impact of derivative warrant liabilities, of $40 million to $41 million on revenue ranging from $160 million to $164 million.
China Sky said the lower earnings and revenue guidance for 2010 comes after distributors severed their relationships because the company's disclosure of their business information in its filings with the
Securities and Exchange Commission
had supposedly led to "increased scrutiny of their financial performance by government authorities within China."
"We are disappointed with the decision by several of our larger distributors to end their cooperation with China Sky One," said Yan-Qing Liu, the company's chairman and CEO, in a statement. "We expect to recoup this lost business over time by building new relationships with reputable provincial and national distributors."
In addition, China Sky said its CFO Stanley Hao has resigned, citing health concerns that forced Hao to take a leave of absence since July. The announcement came one day after Global Hunter Securities discontinued coverage of the company.
Shares of China Sky One Medical plunged by $2.74, or 28.3%, to $6.95 in Tuesday's premarket session. The average daily share volume for China Sky is 120,000.
dropped by $3.14, or 52.4%, to $2.85 in the premarket session after the company said it has received verbal notice from Food and Drug Administration that programs for advanced hepatitis C drug candidates IDX184 and IDX320 have been placed on clinical hold. The news came after possible liver toxicity was discovered in healthy volunteers exposed to the drugs.
Adam Feuerstein notes that the clinical hold comes at a particularly bad time for
because the company has been seeking development partners for its most advanced hepatitis C drug candidates. The average daily share volume for Idenix is 240,000.
On the upside,
( SOMX) rose by 22 cents, or 5.7%, to $4.05 in the premarket session after the company said its sleep drug Silenor is commercially available by prescription in the U.S.
announced a deal with
Procter & Gamble
to co-promote Silenor to doctors and pharmacies. As part of the agreement, Somaxon will pay P&G a combination of fixed fees and a royalty based on U.S. net sales. The agreement expires at the end of 2012 but is renewable.
"Our combined sales teams will begin full-scale, field-based promotion of the product on September 20, 2010, targeting approximately 35,000 physicians and 25,000 pharmacies across the U.S.," said Richard W. Pascoe, Somaxon's President and CEO. The average daily share volume for Somaxon is 89,000.
-- Written by Robert Holmes in Boston
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