A trading halt in shares of
was lifted Thursday morning after the company revised a press release concerning a medical device approval.
Largo, Fla.-based GeoPharma issued a detailed clarification of Wednesday's release, stating that its Mucotrol medical device received marketing clearance from the Food and Drug Administration to treat oral mucositis -- painful mouth sores caused by some cancer treatments.
In its Wednesday press release, GeoPharma had characterized Mucotrol as a "prescription product," which led many investors -- and the FDA -- to assume it was a drug. The release pushed GeoPharma shares up 153% to $11.25 in early Wednesday trading. Wednesday afternoon, the stock tumbled and was subsequently halted at $6.81 after FDA officials told media outlets, including this Web site, that they had no record of Mucotrol.
agency later backtracked, saying the treatment had been cleared for marketing on Nov. 24 -- not as a drug, but as a device. Thursday, GeoPharma confirmed that Mucotrol had received a so-called 510(k) marketing clearance because of its substantial similarity to a product already on the market. That product is GelClair, marketed by
In its updated press release Thursday, GeoPharma withdrew its estimate of the market for Mucotrol, saying revenue projections for the product cannot be made at this time. That's a turnaround from Wednesday, when the company had pegged the potential market for Mucotrol in the range of $75 million to $300 million. By comparison, OSI reported $911,000 in sales for GelClair in the nine months ended June 30, 2004, and forecasted sales of $1.2 million to $1.5 million for fiscal 2004.
GeoPharma shares were bouncing around in heavy volume Thursday, recently up 41 cents, or 6%, at $7.22.
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Adam Feuerstein writes regularly for RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to