Xenoport shares fall on wider-than-expected 1Q loss
NEW YORK—Shares of biotechnology company Xenoport Inc. fell Thursday after the company reported a wider-than-expected first-quarter loss on higher costs and lower payments from development partners.
The stock slipped 78 cents, or 1.9 percent, to $40.22. Shares have traded between $36.35 and $66.34 over the last 52 weeks.
The company lost $7.3 million, or 29 cents per share, compared with a loss of $3.3 million, or 14 cents per share, during the same period a year prior. Revenue fell to $15 million from $16.5 million on lower payments from its partners GlaxoSmithKline and Astellas Pharma Inc.
Analysts polled by Thomson Financial expected a loss of 2 cents per share on revenue of $23.7 million, on average.
Xenoport is developing XP13512 with GlaxoSmithKline to treat restless legs syndrome, a neurological disorder characterized by sensations in the legs and an urge to move them for relief. Wall Street mostly brushed aside the earnings results and focused more on that drug's potential. Several analysts expect the companies to ask for Food and Drug Administration approval before the end of the year.
"We believe the consistently positive efficacy and safety (at high and low doses) from these trials reduce the regulatory risk and we expect approval in the second half of 2009," said RBC Capital Markets analyst Michael Yee, in a note to investors.
He reaffirmed a "Outperform" rating on the stock with a $75 price target.
Credit Suisse analyst Y. Katherine Xu also reaffirmed a "Outperform" rating and said the company will likely get by without seeking new financing, as long as scheduled milestone payments arrive. She reaffirmed a $70 price target for the company.
"We continue to view XenoPort as one of the top midcap names in the biotech sector, with solid fundamentals, a strong balance sheet, and strong upcoming catalysts," she said, in a note to investors.
Looking ahead, several other analysts also point to the company's other development programs, including a midstage programs on Solzira as a treatment for various types of pain.
(This version CORRECTS to Thursday sted Tuesday.)
