>>NEW YORK (AP) -- Pharmion Corp. shares closed down Wednesday as investors sold off the pharmaceutical maker's stock on concerns that one of its medications could face difficult sales conditions this year.
The Boulder, Colo.-based company reported late Tuesday that it swung to a first-quarter profit and handily beat Wall Street expectations. However, Pharmion's sales fell short of consensus estimates and triggered concern about inventory levels connected to its Vidaza drug.
The company's shares fell $2.99, or 11.5 percent, to close at $23.06 on the Nasdaq. The stock traded as low as $22.69 during the day, which was still above its 52-week low of $20.60 set last May.
Pharmion reported first-quarter earnings of $4.3 million, or 13 cents a share, compared to a loss of $9.8 million, or 40 cents a share, last year. Revenue more than tripled to $51.7 million from $15.7 million a year ago.
On average, analysts polled by Thomson Financial expected earnings of 8 cents per share on revenue of $54.3 million.
The company said it was pleased with its profitability during the quarter, but vowed to remain focused on growing sales -- particularly for Vidaza in the United States. The company hopes to increase marketing initiatives on the drug, which is used to treat a disease in which the bone marrow produces dysfunctional blood cells.
Looking ahead, Pharmion said that it continued to expect 2005 earnings of 33 cents to 48 cents per share on sales of $229 million to $245 million. Analysts are expecting earnings of 41 cents per share on sales of $243.2 million.
But, that didn't settle well with some analysts. C.E. Unterberg, Towbin lowered its rating on the company to an "UnderPerform" from "Market Perform" because of the first-quarter top-line miss.
"The recent trend in Vidaza sales makes 2005 that much more difficult to watch, even though the company still maintained 2005 guidance," said analyst Matthew Osborne in a note to clients. "More importantly competitive threats could severely impact 2006 earnings."
Osborne also noted that Pharmion management indicated that wholesaler inventory levels for Vidaza were reduced from three weeks to two weeks during the quarter -- which might be partly to blame for the light revenues. He said underlying demand for the drug is what is most concerning for investors.<<
This is from April 27th. On top of this, Cramer said sell yesterday, which I take to be a contrarian indicator. Today PHRM stock action indicates some still believe in him, as it has plumbed a new 1 year low. Very tempted, as inventory levels can't get much lower than this report. However the possibility of competition next year is not to be discounted. Insiders have bought not that long ago in the high 20s. Might have to see what they're doing now.
Edit: No activity since February/March, but FMR has bailed most of its position, to the tune of 1.8 million shares, since March.
Cheers, Tuck |
