December 14, 2000
QLT Dn 31%; Analyst Calls Stk 'Hot'
Opportunity
By ANDY GEORGIADES
Of DOW JONES NEWSWIRES
TORONTO -- A fourth-quarter shortfall in Visudyne sales has sent shares
of QLT Inc. (QLTI) down 31% Thursday, but at least one analyst called
the stock a "hot opportunity."
As reported, QLT estimated fourth-quarter sales would be $36 million to
$38 million due to slower-than-expected demand for Visudyne. The
company attributed the slower growth to reimbursment issues and currency
fluctuations.
Analysts were expecting revenues of about $40 million.
"It's not as though Visudyne isn't meeting success in the marketplace as an
application therapy," Sam Gerszonowicz, analyst at HCFP Brenner
Securities, told Dow Jones. "This is still hotter than anything, even if it
comes in at $35 million."
Visudyne is the only treatment available for age-related macular
degeneration, which causes blindness. In the U.S. and Europe, the market
for such treatments has been estimated at $1.7 billion a year.
On Nasdaq, the stock is down 12 7/16 to 28 on about 6.4 million shares.
On Wednesday, QLT lost about 15%.
Company Web site - qltinc.com
Sam Gerszonowicz, analyst at HCFP Brenner Securities, blamed the
selling of QLT Inc.'s (QLTI) shares on a "jittery" market.
"There's no indication that the projections for this quarter are really that far
off," he said. "I think 2% or even 5% variance in a normal environment
would be understood to be within the standard deviation."
He noted that the company didn't change its guidance for 2001, and
expects sales to surpass $200 million for that year.
Meanwhile, Leerink Swann & Co. analyst Navroze Alphonse said he's
always had concerns about demand for Visudyne, and said the market was
"doing a pretty good job" Thursday at arriving at a fair valuation for the
stock.
"I think the initial fourth-quarter miss really does start to speak to some of
the greater concerns about the size of the actual market," he said,
downplaying the reimbursement question and currency fluctuations.
Alphonse said the company's guidance for 2001 sales of $240 million to
$260 million is still a bit high. He sees revenues of only $212 million.
In the U.S., issues of reimbursement were settled in November by the
Health Care Finance Administration, the reimbursement arm of Medicare,
and will take effect starting Jan. 1.
Gerszonowicz, who participated in QLT's conference call for analysts and
institutional investors Thursday morning, said centralized healthcare
systems in Europe have caused delays in Visydyne's approval there.
Otherwise, he said analysts on the call were positive, and he predicted few
would downgrade the stock.
He went on to reiterate that the shortfall was a "slight flattening of the
growth curve" after sales "rocketed" in the second quarter, adding he won't
change his $60 target. However, that doesn't mean there aren't any risks.
"My question about QLT is still the same: in a year or more from now, will
there be a competitor with a better product? But for the next year I don't
see that there's anything to be concerned about," he said. |
