Israeli medical technology company
(SWX:ORIDN) said on Wednesday it received U.S. Food and Drug Administration (FDA) approval for its breath ID test product. The non-invasive, instantaneous product detects the helicobacter pylori bacteria, the main cause of peptic ulcers and gastric cancer, the company said.
Oridion President and CEO George Yariv said the potential market for breath ID is $500 million in the United States and another $500 million in Japan, the company's main target markets.
Oridion said that for actual market launch it still needed approval from the FDA for the urea tablet used in the application of the test.
But Yariv says it's full-steam ahead. "The product is ready and will be launched this year," he declared.
The news follows a plunge in Oridion shares, listed on the Swiss SWX New Market, with dealers citing a downgrade and a cut in earnings estimates by
, which had led Oridion's initial public offering.
The shares fell to 19.50 Swiss francs, a low for the year, but recovered to end down more than 36% at 22.95 francs. So far this year, the stock has lost more than 44%. UBS Warburg cut its estimate for the firm's 2001 sales by 30% to $15.3 million. It cut the forecast for 2002 by 25% to $43.9 million. It lowered its estimate for 2002 earnings per share by 74% to $0.22.
UBS Warburg also cut its rating for the share from a Strong Buy, to a Buy. It set a new price target of 45 francs, down from 70 francs.
It said the further trend of the stock, which listed on the SWX New Market in April 2000, depended on U.S. marketing approval for breath ID.
CEO Yariv said it was too early to comment on UBS Warburg's numbers since, he said, they won't be known for another few weeks.
"But, I agree with market conditions they speak about," Yariv said, citing "difficult trading conditions" for a number of its partners.
"In the last quarter of this year where we expect the launch of new products there could be a delay of a few months to the next quarter," he said.
Four months ago, shareholders in the firm took advantage of the high 45 franc per share price in order to sell $120 million in shares. Since then the stock has dropped to its current level of 22 francs.
Oridion still hasn't shown a profit. In the first quarter of 2001, its revenues reached $1.8 million, as compared to revenues of $3.7 million in the previous quarter. The firm's loss in the Q1 reached $3.5 million, as compared to the previous quarter's loss of $1.3 million.