08/28 3:41P (DJ) =Organogenesis Shares Off 9.5%, Set 52 -Week Low >ORG
NEW YORK (Dow Jones)--Shares of Organogenesis Inc. (ORG) continued their
downward spiral Friday, setting a 52 -low on exceptionally heavy trading
volume.
Analysts with sell ratings on the stock said it has long been overvalued.
Industry observers also said there has been a lot of short selling in
Organogenesis stock.
A number of large block trades were executed Friday.
Shares of the Canton, Mass., wound-care company were recently trading at 9
1/2, down 1, or 9.5%. The 52 -week low of 8 5/8 set Friday is about 74% below
the 52 -week high of 37 51/64 set April 24. Volume of 1.1 million shares has
far outpaced the daily average of 294,470.
Analysts expressed concern about the potential of the skin-replacement
market, which Organogenesis entered into in June with the launch of Apligraf.
The product was approved by the Food and Drug Administration in May for the
treatment of venous leg ulcers.
"The marketplace is not ready to accept these (skin-replacement) products,"
said Even Sturza, an analyst with Sturza's Medical Research.
Michael Ehrenreich, a principle with the investment research firm Techvest,
said Apligraf does have some efficacy and added that he thinks the product
will sell. However, he said, "it's a small market in my opinion."
Not according to Alan Tuck, Organogenesis' chief strategic officer. He said
a large market exists for the product and added that the fundamentals of
Organogenesis are "moving along just as we've told people."
The launch of Apligraf and the acceptance by doctors are both "very strong,"
Tuck said, though he couldn't provde any sales figures.
"We do not expect large sales numbers this year because of the strategy of
getting physician acceptance," he said.
Nothing has occurred fundamentally within the company that should be causing
the recent stock volatility, he said.
Ehrenreich said sales of Apligraf in the current quarter - the first one for
which they'll be available - will be key. A high enough number could prompt
him to change his rating. But for now, he's maintaining a sell rating.
At least one analyst is bullish on the company. Recently, Jesup & Lamont
initiated coverage of Organogenesis with a strong buy.
- Melanie Trottman 201 -938 -5287 |
