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.
In March, the company's
chief executive and chief financial officer resigned. "Our first and foremost priority is to accelerate BiDil sales," said Karabelas. He added that the company is trying to improve productivity by using its own 144-member sales force, expanding insurance coverage and entering into partnerships.
NitroMed's major research goal is to develop an extended-release version of BiDil, he said. The drug is now taken three times a day.