Nope, not on vacation, takin' care of business.
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Theragenics CEO Hopes To Quell Volatility With NYSE Listing
By MELANIE TROTTMAN
Dow Jones Newswires
NEW YORK -- For the investor in Theragenics Corp. (THRX), checking a recent daily stock quote for the cancer treatment producer has been much like riding a seesaw - up and down.
Chairman and Chief Executive M. Christine Jacobs hopes to steady the plank with the company's official transfer Thursday to the New York Stock Exchange from Nasdaq.
"The largest reason (for the move) is to dampen the volatility in the stock price," Jacobs told Dow Jones. The company also seeks to maintain liquidity, she added.
Jacobs said she is comfortable with First Call Corp.'s 1998 earnings estimate of 45 cents a share. "I think it is achievable," she said. In 1997 the company earned 33 cents a diluted share, adjusted for the stock split.
But trading in the stock hasn't been as stable as the earnings growth. Shares of the Norcross, Ga., company have had a long stint on Nasdaq, where they've traded since 1986. In the past year alone, the stock has dipped to as low as 12 13/16 last August and has soared to as high as 35 3/8 in March,when the company declared a 2-for-1 stock split. The shares are currently trading near 14.
The stock was pressured in early July after a Dain Rauscher Inc. analyst cut ratings on the company and others in the brachytherapy market to neutral from buy. In that technique, radiological "seeds" are implanted in cancerous tumors, allowing patients to be given much higher doses of radiation than in traditional treatments. The treatment is most often used for prostate cancer.
At the time of the downgrade, market watchers said the note heightened competitive concerns that had been circulating in the industry for weeks. Others said the drop was a buying opportunity. Jacobs agrees.
Theragenics carefully considered its move to the NYSE for eight months, tracking other medical companies to see what happened to their stocks in the short-and long-term.
The conclusion: the NYSE has tighter spreads and greater visibility than Theragenics' soon-to-be former trading ground. "I think our investors - in the long run - will reap greater benefits and certainly some efficient trading practices," she said.
But achieving a more stable trading pattern isn't the only benefit Jacobs said Theragenics shareholders stand to gain.
The company was the first to market with its Palladium 103 product, Jacobs said. Palladium 103 has been marketed for 11 years and is the active ingredient in TheraSeed, the company's product marketed to treat prostate cancer.
The product - Theragenics' only one on the market - reaped revenue of
nearly $25 million in 1997, up from about $12 million in 1996. And growth opportunities remain, Jacobs said. In June, TheraSeed received European marketing approval, and the company aims to increase the product's current U.S. market share from about 8% to between 25% and 30%, Jacobs said.
TheraSeed is also licensed by the Food and Drug Administration to treat all solid localized tumors.
Theragenics' TheraSeed allows physicians to introduce short-lived
radioactive material directly into the cancer, a method that concentrates on the diseased tissue and minimizes the effects on surrounding, healthy areas.
"The big health story is that these seeds are being used as an alternative to radical surgery," Chairman and Chief Executive Jacobs said.
Competitive concerns surrounding the descent in Theragenics' stock last month are nothing new, Jacobs said. Indeed, in the company's 1997 annual report, she acknowledged that "there are no less than six new companies planning to manufacture isotopes intended for the treatment of prostate cancer."
While she believes most of the other companies have little commercial
production experience in the industry, she said Theragenics "will closely monitor competitive activities during the next two years."
One thing Theragenics doesn't have is a broad product pipeline. "We are a one-pony act,"Jacobs conceded. She acknowledges that the pipeline issue is a valid one and said the company is "keenly aware" that there are two things it has to do. The first, she said, is to use Palladium 103 in other applications.
The second, and most important, is to maintain the company's technological leadership, she said. Staying ahead of newcomers is a crucial focus for Theragenics, Jacobs said.
That's what led the company to enter a definitive agreement in June 1997 granting Johnson & Johnson Co.'s (JNJ) Indigo Medical Inc. unit exclusive worldwide rights to market and sell TheraSeed. The agreement alleviated Theragenics of the marketing so it can focus on manufacturing palladium, Jacobs said.
-Melanie Trottman; 201-938-5287
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