=DepoTech-2: Selloff 'Somewhat Of An Overreaction' - Analyst
Dow Jones News Service via Dow Jones
NEW YORK (Dow Jones)--Overall market woes and a negative decision from a Food and Drug Administration Panel coupled to drive shares of DepoTech Corp. (DEPO) as low as 3 3/8 Friday in a selloff one analyst called "somewhat of an overreaction."
The Emeryville, Calif.-based company reported Thursday that the Oncologic Drugs Advisory Committee to the FDA declined to recommend approval of DepoCyt, an anticancer agent, for use in patients with neoplastic meningitis arising from solid tumors.
"I think it's somewhat of an overreaction," said Mary Ann Gray, analyst at SBC Warburg Dillon Read & Co. "Clearly, the FDA panel rulling was a negative, but I think that this by no means calls into question their underlying technology."
Despite the negative news and her own lowered earnings estimates and
investment rating on the stock, Gray said she thinks DepoCyt will eventually be approved. She projected U.S. approval may take a year or more. DepoCyt is an injectable, sustained-release formulation of the chemotherapeutic agent cytarabine that is based on DepoTech's proprietary DepoFoam technology.
Edward Erickson, DepoTech president and chief executive, said that, while the company planned to take steps toward future FDA approval, it was too early to say when that nod might come.
Gray predicted the stock would trade well off its highs until DepoTech
releases more trial information on DepoCyt and other drugs in its development pipeline.
Shares of DepoTech were recently trading at 4, down 9, or 69.2%, on volume of 3.6 million shares compared with an average daily volume of 88,800. |
