NEW YORK (TheStreet) -- DermaSciences (DSCI) stock is plummeting, down 27.32% to $4.07 on heavy trading volume on Thursday morning, after the pharmaceutical company pulled one of its treatments from late-stage trials.
The Princeton-based company ended Phase 3 trials for its diabetic foot ulcer healing treatment today, after a data monitoring committee issued a futility determination on the drug, Derma Sciences said in a statement.
"We are very disappointed with the findings of the analyses of the DMC, but are grateful for the support and commitment from the participating patients and the study investigators," CEO Edward J. Quilty said. "We have stopped further enrollment and initiated an orderly termination of the aclerastide trials and program, which we believe will be substantially complete by year end."
There were no safety concerns related to the treatment, the company noted.
So far today, 1.4 million shares of Derma Sciences have traded, versus its 30-day average of about 140,000 shares.
Separately, TheStreet Ratings team rates DERMA SCIENCES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate DERMA SCIENCES INC (DSCI) 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 feeble growth in its earnings per share, disappointing return on equity, weak operating cash flow, deteriorating net income and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DERMA SCIENCES INC's earnings per share declined by 5.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, DERMA SCIENCES INC reported poor results of -$1.62 versus -$1.41 in the prior year. For the next year, the market is expecting a contraction of 1.9% in earnings (-$1.65 versus -$1.62).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, DERMA SCIENCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$7.79 million or 128.60% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Looking at the price performance of DSCI's shares over the past 12 months, there is not much good news to report: the stock is down 43.13%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Health Care Equipment & Supplies industry average. The net income has decreased by 6.9% when compared to the same quarter one year ago, dropping from -$8.69 million to -$9.29 million.
- You can view the full analysis from the report here: DSCI
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