Here's a roughly parallel situation to CCSI, too rough for an analogy but still interesting. Dusa Pharmaceuticals announced in March that they had an "agreement in principle" with a major distributor for their patented chemical compound to be used with their patented light source. Unlike CCSI, they're don't have FDA approval yet, but because of highly successful Phase II and III trials getting rid of actinic keratoses (precancerous skin spots) in a simple painless procedure via photodynamic therapy, they're very confident that their FDA submission at the end of this qtr. will lead to approval. So they want all the marketing procedures in place first.
The stock was trading around 12 before they announced the distribution agreement in principle. The stock moved up to the 14's and 15's for a few weeks then gradually drifted lower. But at the end of this week Dusa said that the agreement in principle was off because of policy changes at the parent company of the distributor, changes that had nothing to do with Dusa or its product or, apparently, the distributor. Although Dusa's fundamental position hasn't changed beyond the need to reopen negotiations with other distributors (and there's time because there's nowhere to go until FDA approval), the stock fell out of bed and closed on Friday at 6 15/16. Had Dusa waited until a deal was finalized before saying anything, they might yet be selling around 12. But they preliminarily announced before their deal was finalized and had the rug pulled out.
Apparently, these distribution deals can be pretty dicey. CCSI is probably wise to stay mum until every last paper is signed, because who knows that something that looks great on Tuesday won't fall out of bed on Wednesday because of any number of reasons. For all we know, this could have already happened and thus accounted, in part, for the long delay. So while the deal may yet be just around the corner, the corner could be on one helluva long block. (Having made money on DUSA some months ago, I jumped in again because of what I think is an ephemeral event that unduly panicked traders.) |
