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Biotech / Medical : CYBR CyberCare the new look of healthcare -- Ignore unavailable to you. Want to Upgrade?

To: Tadsamillionaire who wrote (1976)	5/26/2000 1:01:00 AM
From: StockDung	Respond to of 3392

Cyber-Care facing more suits May 25, 2000 03:36 PM ET By Karen J. Cohen, dbusiness.com NEWS ANALYSIS BOCA RATON, Fla., May 25 (dbusiness.com) -- More shareholder lawsuits against Cyber-Care popped up this week as the company confirmed that the Securities and Exchange Commission is peering into its marketing practices. Stock Quote CYBER-CARE INC CYBR 3.94 -1.13 -22.22% Results delayed 20+ minutes. In addition to the three suits filed last week, two more law firms joined the fray: Wolf Popper LLP in New York and Burt & Pucillo LLP of West Palm Beach. All the suits allege that Cyber-Care (Nasdaq: CYBR) misrepresented the orders for its health care monitoring system in order to inflate the firm's stock. After deals announced by the company and some good reports from analysts, the stock jumped late last year from $1 per share to $37 per share in February. Since early May, the stock has nose-dived, hovering in the single digits. The company vehemently denies the charges lodged in the suits and contends that its troubles stem from short-sellers trying to make a killing on the stock. Danny Bivins, Cyber-Care senior VP and general counsel, characterized the SEC investigation as "an informal inquiry regarding Cyber-Care and its stock." The SEC, he said, "has indicated to us that their undertaking of the inquiry should be in no way construed to be any inference of wrongdoing. And we know of no wrongdoing." SEC attorney James Sallah has talked to several Cyber-Care business partners over the last weeks, apparently comparing Cyber-Care press releases to the actual state of contract arrangements between Cyber-Care and other firms. One such contact was Charles Kight, administrator for the Florida Agency of Health Care Administration, who said that Sallah contacted him last week and asked whether he felt a press release by the company in December accurately characterized the state of negotiations, adding that the inquiry was routine and that it did not indicate the company had done anything wrong. The company indicated that the state had agreed to test Cyber-Care's home monitoring system, the Electronic HouseCall System, with 25 of its patients. Kight said he told Sallah that he felt Cyber-Care's information was technically accurate, but that no contract was as yet worked out. "We considered it a bit premature. We just don't want to mislead people," Kight said. The Electronic HouseCall System is an Internet-based health care monitoring device that lets doctors and nurses monitor patients from home in real time. Cyber-Care began life in 1989 and went public in 1992 under the name Heart Labs of America. In 1996, it changed its name to Medical Industries of America. Last year, after buying the Atlanta firm that developed the home monitoring device, the company changed its name to Cyber-Care. The pilot program with the Florida health care agency would call for a six-month trial of the device by 25 Medicaid recipients suffering from chronic obstructive pulmonary disease. Kight said that the Florida agency had not yet received permission from the federal government's Health Care Financing Administration to implement the program. Meanwhile, Cyber-Care still awaits approval of the device from the Food and Drug Administration. It filed for FDA approval in January and was expecting the agency's OK any day now. Instead, the company heard the FDA also is looking into them, specifically over whether the company has marketed the device before getting agency approval. Back at company headquarters, management is gathering its resources to fight back. Bivins said the firm has a plan of action, though he would not specify any contemplated moves. He did say, "We have a very loyal shareholder base, and we are very appreciative of our shareholder support." Meanwhile, one person who follows the company said it could weather this storm, especially once the FDA approves the device. Robert M. Wasserman, an analyst with Sterling Financial Investment Group in Boca Raton, said when all things are considered, the company still has a good product. But he said he wouldn't be surprised if more lawsuits come along. Shareholder lawsuits, Wasserman said, are becoming pretty common, "especially if the company has money in the bank." It will be up to the courts to determine whether the company was hyping its stock, but companies do survive such claims. "The question is how expensive it is going to be. Shareholders are trying to get the value of their stock back. The question is whether the company did anything differently when the stock was at $40 than when it was at 50 cents." Cyber-Care's growing pains will eventually end, Wasserman said. "They need FDA approval, he said. "That is a hurdle they are going to have to jump." The company has seen its stock price soar as high as $40 per share in the past year and as low as 94 cents. On Thursday afternoon, the stock was down more than 22 percent, or $1.13, at $3.94 on a high trading volume. Karen J. Cohen is a staff writer for dbusiness.com. E-mail her with story ideas and comments. Printer-friendly format