Monday, October 9, 2000
The biotech industry last week joined its high tech compatriots
with earnings warnings - some from companies, and some from sellside analysts
- and the prophesies knocked $4.3 billion off the valuation of three companies
(see ("Earning One's Keep").
Leading the pack was a $3.2 billion (20 percent) valuation
drop for MedImmune (MEDI), which fell $15.375 to $61.875. The stock tumbled
$20.50 (27 percent) to $56.75 on 27.8 million shares on Monday after Banc of
America analyst Eric Ende lowered his non-U.S. sales estimate for MEDI's Synagis
palivizumab humanized monoclonal antibody against respiratory syncytial virus
(RSV) to $47 million from $83 million in the 2000/2001 season, and to $87 million
from $140 million in the 2001/2002 season (see B15).
MEDI's guidance remains unchanged. The company said it remains on track to sell $50 million of the product in the '00/'01 RSV season, and $100 million in the '01/'02 season.
QLT (TSE:QLT; QLTI) shed $1 billion (20 percent). The price
slid $7.875 (12 percent) to $56.063 on 5.5 million shares on NASDAQ on Wednesday
after Leerink Swann analyst Robert Uhl downgraded the stock based on the results
of a poll of 40 retinal specialists showing lower utilization rates than had
been seen in previous polls for QLTI's Visudyne verteporfin for wet age-related
macular degeneration (AMD). The results prompted Uhl to reduce his 2001 sales
projection to $96 million from $108 million and his 2002 projection to $206
million from $309 million (see B15). QLTI last week filed for
European marketing approval of Visudyne to treat eye diseases other than AMD.
QLTI finished Friday at $56.50, down $14.375 on the week.
CFO Kenneth Galbraith said the company hasn't seen any of the trends that Uhl's report suggested. He said QLTI is on track to meet or slightly exceed the $30 million third quarter consensus estimates for Visudyne, and to sell $100 million of the product in 2000 after its U.S. launch in mid-March. QLTI believes Visudyne will be the biggest selling ophthalmic product by 2003, which would have it outpacing the $650 million in annual sales posted by Pharmacia's Xalatan latanoprost glaucoma treatment.
Meanwhile CollaGenex (CGPI) shed $17.9 million of its market
cap (25 percent), slipping $2.063 to $6.063, after announcing that it expects
$4.2 million in third quarter sales of Periostat for periodontal disease, down
from $5.7 million in the second quarter and flat from the year earlier quarter.
CGPI said the product is on track to sell $24 million this year, and the quarterly
shortfall is due to wholesalers reducing inventory.
With the general market downturn last week - the BioCentury 100 was off 8 percent, the same fall as the NASDAQ Composite, investors may have been less charitable than earlier in the year.
Mitch Silber of The Carson Group noted that the biotech market
brushed off second quarter shortfalls. "If you look at last quarter, a lot of
the big guys whiffed. Amgen, Biogen and Idec were all light. Even though
they missed, most forgave them because if you want to be in big cap biotech,
there's only a few names," he said.
On the upside, Integra (IART) popped $1.875 (17 percent)
to $12.625 after announcing it expects to lose less than the $0.04 loss analysts
have for the biomaterial company in the third quarter. The numbers will reflecter
strong sales of DuraGen dural graft matrix coupled with lower than expected
License to print money
Add InforMax (INMX) to the list of recent biotech IPOs that
have turned quick paper profits for investors. INMX, which is developing bioinformatics