Regulatory approvals helped health stocks, sort of, and health indices stayed clear of the red midweek.An approval was enough for Hi-Tech Pharmacal ( HITK) on Wednesday, but not enough for Stereotaxis ( STXS). And analysts placed predictions as ZymoGenetics ( ZGEN) perches on the heels of its own FDA action. Elsewhere Epix ( EPIX) revised results and Theravance ( THRX) will offer $150 million in notes. Good news first, Stereotaxis said Tuesday post-close that the FDA approved its "partnered magnetic irrigated catheter", used to treat irregular heart rhythms, after a six months delay. However, it also announced that quarterly and annual revenue will fall short of expectations due to the delayed launch of the product in the U.S. and also in Europe where it hit the market in November after an expected early 2007 launch. The company now expects $11 million in quarterly revenue and $39 million for the year. Analysts surveyed by Thomson Financial were looking for $16.5 million and $46 million, respectively. Thus shares fell $2.43, or 21.16%, to $8.98. "While our fourth quarter performance is disappointing, we believe that the delayed order and revenue momentum will ultimately be regained once full scale availability of the irrigated catheter in the U.S. is attained," said the company's CEO Bevil Hogg in a press release. Sticking with FDA approvals, Hi-Tech Pharmacal said Wednesday that the regulatory agency granted final approval to the company's generic of GlaxoSmithKline's Flonase nasal spray for allergic and non-allergic rhinitis. Hi-Tech said it will immediately begin shipping its fluticasone propionate nasal spray, 50mcg. The branded and generic nasal spray garnered sales of $700 million for the 12 months ended June 2007, according to IMS sales data. The company added $1.83, or 19.2%, to $11.35. And a day away from a possible approval of its own, ZymoGenetics shrunk back Wednesday when Brean Murray, Carret & Co. analyst Jonathan Aschoff initiated coverage on the stock with a sell rating. Aschoff questioned whether ZymoGenetics' blood clotting agent Recothrom, or rThrombin, will receive an FDA approval on Thursday without further delays based on its safety profile. Aschoff opined that rather than granting the product approval on its already postponed action date, the agency may issue a complete response letter, a means of requesting additional data or information. Shares were trading down 46 cents, or 3.7%, to $12.06. Elsewhere, Epix Pharmaceuticals retreated 40 cents, or 11.2%, to $3.18 on Wednesday, after a bit of data backtracking. The company said that results reported on December 18 on a midstage study on PRX-03140 contained errors. The two-week, nine-patient trial was studying the drug as a monotherapy and separately in combination with Aricept (marketed by Eisai and Pfizer ( PFE)) in patients with mild Alzheimer's disease. The error, which Epix blamed on a third-party contract research organization, was in the monotherapy arm of the study. Specifically, the magnitude of the mean improvement at the higher 150 mg dose was less than previously reported, although the company said it was still statistically significant. But at least one analyst cautions about drawing conclusions from such trials anyway. "This trial is useful for what it is, a proof-of-concept and dose-finding study for PRX-03140," said Cowen and Co analyst Ian Sanderson in a note to investors. "But because results for one to two patients can swing the data, we would not be relying upon the data to assess the efficacy of, or prospects for, PRX-03140." Epix plans to initiate a phase IIb trial on the drug early this year with its partner GlaxoSmithKline. The stock is a component of the Nasdaq biotechnology index, which was up 9.11, or 1.1%, at 850.82.
Last, in case you missed it in last night's
"Late Winners & Losers" , Theravance said Tuesday post-close that it will offer $150 million of unsecured notes due in 2015, using the proceeds for general corporate purposes. Merrill Lynch and Goldman Sachs are joint-book running managers for the offering, and underwriters were granted a 30-day option to purchase an additional $22.5 million in notes to cover overallotments. Shares of the biopharmaceutical company fell $2.29, or 10.6%, to $19.39 on heavy volume Wednesday.