Cadence Pharma falls to life-low on disappointing results
Cadence Pharma falls to life-low on disappointing results (Global Markets) - Cadence Pharmaceuticals Inc's (CADX.O) shares fell to their life-low after the biopharmaceutical company reported a larger-than-expected first-quarter loss on costs related to the recall of its Ofirmev injectable painkiller.Stock Market Predictions
The company suspended production of Ofirmev by its primary supplier after it recalled one lot of Ofirmev in February when it found an unidentified particle in a vial. It incurred higher costs on transition of shipments to a secondary supplier.
On Thursday, Cadence said it expects revenue from Ofirmev sales of $10 million to $10.4 million for the second quarter.
At least two brokerages lowered their price target on the stock and reduced their sales estimates on Ofirmev, but maintained their "outperform" rating on the stock as they continue to believe in the sales potential of the drug.
"Our significant reduction in estimates is the result of increasing our time to peak sales given the slower-than-anticipated launch, as well as slightly lower peak penetration," Wedbush analyst Richard Lau said.
The analyst, however, said he continues to believe Ofirmev will be a strong selling drug given its differentiated position as a non-narcotic intravenous analgesic.
"Cadence's characterization of clinical and marketing efforts should enhance conviction on Ofirmev's value in Cadence's share price, albeit slower than we had initially projected," JMP Securities analyst Charles Duncan said.
The company's stock - among the top percentage losers on the Nasdaq on Friday - fell to a low of $3.07. It was later down 12 percent at $3.15.
(Reporting by Zeba Siddiqui in Bangalore; Editing by Joyjeet Das)