05:44 PM ET 12/03/98Calypte test finds HIV in urine, stock rockets
By Kristin Roberts
NEW YORK, Dec 3 (Reuters) - A new urine test from biotech
upstart Calypte Biomedical Corp. fulfilled its promise by
showing traces of the HIV virus in people whose blood was
clean, sending the company's stock price up 72 percent.
Researchers at the Clinical Reference Laboratory in Kansas
said the Calypte test, the first of its kind, showed one in
3,000 Americans have antibodies to the HIV-1 virus in their
urine, indicating they were exposed to it at some point.
But the people considered at a low risk for HIV did not
have the infection in their blood. This could mean they were
exposed to the virus, usually through sexual intercourse, but
somehow fought it off, the researchers said.
The study said that HIV-1 antibodies show up in urine
nearly 1 percent more frequently than in blood.
News of the study sent the company's stock price on the
Nasdaq shot up $1.63 and closed at $3.88 on volume of nearly
1,368,600 shares, or more than 30 times its average volume.
"Obviously we're pleased with the (stock) increase, but
it's generated from the science," John DePietro, Calypte's
chief financial officer, told Reuters. "That's what our company
is all about - research and discovery."
DePietro would not predict if the company's stock would
maintain its higher market price.
An analyst watching the company, however, had no doubt.
"It's still undervalued," Fred Toney, an analyst with
Pacific Growth Equities, said. "The scientific data from this
study makes it no longer a scientific question."
Toney said he expects Calypte will be profitable by the end
of 1999, but earnings could materialize sooner if the company
gets hold of the blood bank testing market. Toney estimated
that market is worth $75 million a year.
"If this test is mandated for that blood supply, they will
be profitable very quickly after they start selling in that
market," he said, noting that about 25 million blood units are
donated a year. The test price for each would be about $3.
First Call Corp. polled one analyst who projected Calypte
would not be profitable until the year 2000. Net losses are
expected to continue, as they have since 1996, through the nextfive quarters.
In the third quarter, the company posted a loss of $2.5
million or $0.20 a share compared to $1.7 million or $0.17 a
share in the year-earlier period.
Calypte's screening test, approved in June, was the first
HIV urine screening test licensed by the U.S. Food and DrugAdministration.
The test confirms the presence of antibodies to HIV-1.
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