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Shares of



continued to fall Tuesday, one day after the stock was pounded when the company produced financial results well below Wall Street's expectations. The number of analysts downgrading the stock ballooned to six in just over 24 hours.

Ivax's shares were down 99 cents, or 7.1%, to $12.91 and a new 52-week low on a split-adjusted basis. Trading volume of 5.7 million shares was more than triple the average daily trade for the last three months. On Monday, the stock fell 23% on 24.7 million shares traded, or 16 times the average daily trade.

For the three months ended Sept. 30, Ivax earned $44.4 million, or 17 cents a share, on revenue of $439.1 million. These third-quarter results take into account a 5-for-4 stock split that took effect Aug. 24.

However, the analysts polled by Thomson First Call were expecting earnings of $53.6 million, or 21 cents a share, on revenue of $467.3 million for the Miami-based generic drug company.

For the same period last year, the company earned $21.6 million, or 9 cents a share, on a split-adjusted basis, on revenue of $360.6 million -- well below this year's third quarter. Ivax took note of the big difference between the quarters, but analysts weren't impressed.

"Unpredictability rears its ugly head again," said Richard Watson of William Blair & Co., in a report to clients Monday afternoon, as he cut his rating to market perform from outperform. Complaining that Ivax has a history of "inconsistent financial performance and overpromising then undelivering," Watson added that "it will be some time before investors return to the name." (He doesn't own shares; his firm doesn't have an investment banking relationship.)

David Moskowitz of Friedman Billings Ramsey dropped his rating Tuesday to market perform from outperform. Like many other analysts, he cut his stock price target and full-year EPS estimate for 2004 and 2005. "Given the margin pressure that the company is experiencing in both U.S. and international markets, we believe that growth will not be as robust as initially expected," he said in a research note. (He doesn't own shares; his firm seeks to do investment banking services with companies mentioned in research reports.)

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A less gloomy downgrade came from Andrew Forman of Advest, who reduced his rating Monday to buy from strong buy. "While we are now more conservative on our forecasts for Ivax's growth prospects, we continue to believe that the company's strong generic pipeline, growing respiratory franchise and its diversified global business favorably position the company to achieve robust 20% EPS growth," Forman told clients on Monday. (He doesn't own shares; his firm says its does or seeks to do business with companies mentioned in research reports.)

Merrill Lynch analyst Gregory B. Gilbert cut his rating to neutral from buy, telling clients on Monday that the company experienced lower-than-expected sales, gross margins and earnings per share during the third quarter.

"We were surprised by the magnitude of this miss for each of these important line items," Gilbert said. "While we have not solidified our estimates for future periods, it is unlikely that our new estimates will be robust to justify a buy rating," Gilbert added. (He doesn't own shares; his firm says its does and seeks to do business with company's mentioned in research reports.)

Ivax tried to look on the bright side Monday. "We are pleased at the continued growth of our business," said Neil Flanzraich, the vice chairman and president. "All our major business regions have generated continued revenue growth."

Flanzraich said Ivax "expects a good fourth quarter and 2005." He said the company expects to meet or exceed its 2004 prediction of 71 cents a share, but the consensus estimate was for 81 cents. Flanzraich did not provide a prediction for next year; the consensus view prior to the earnings announcement was for EPS of 97 cents.

However, he noted that Ivax faces several competitive challenges. For example, Ivax began selling in mid-August a generic version of Neurontin, an epilepsy drug made by


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. Since then, three other companies have entered the market with their generic versions, including a generic firm that is owned by Pfizer. A patent suit by Pfizer against Ivax is pending.

Flanzraich added that "aggressive competitive pricing" for two other Ivax generic products plus "generic pricing pressures and cyclical, weak summer sales" in European markets affected Ivax's results.

Ivax also said on Monday that it had received FDA approval for an asthma drug. Although the drug, albuterol, is generic, Ivax is administering it through a proprietary inhaling device that doesn't use chlorofluorocarbons, or CFCs, as a propellant. CFCs are harmful to the ozone layer, and in June the FDA issued a proposed regulation seeking the removal of CFC-albuterol products from the U.S. marketplace. Ivax's asthma inhaler uses a propellant called hydrofluoroalkanes, or HFAs. Ivax said CFC-albuterol inhalers probably will be removed from the U.S. market in 2006.