Cardiome shares down after 1Q results miss estimates
NEW YORK—Shares of Cardiome Pharma Corp. dipped Wednesday, a day after the Canadian drug developer reported a wider-than-expected first-quarter loss on less licensing fees and increased research and development spending.
The company lost $22.2 million Canadian ($21.6 million), or 35 Canadian cents per share (34 cents), compared with $14 million Canadian, or 23 Canadian cents in the year-ago period.
Revenue fell 76 percent to $400,000 Canadian ($389,680) from $1.7 million Canadian in the prior-year period.
Analysts surveyed by Thomson Financial expected a loss of 22 cents on revenue of $4.9 million.
Cardiome said its loss was due to lower licensing and research collaboration fees and increased research and development spending for its lead investigational drug Kynapid to treat abnormal heart rhythm. A Food and Drug Administration decision on an intravenous form of the drug was expected in January, but has been delayed.
In March, the company announced that it had hired Merrill Lynch as a financial adviser to evaluate partnership interest, as well as potential sale of the company.
Rodman & Renshaw analyst Christopher S. James said that although the FDA has said it will complete its Kynapid review soon and has not asked for additional data, the lack of guidance and the current agency environment will pressure Cardiome shares. However, he added that the Kynapid has a better risk/benefit profile than other comparator drugs on the market.
James rates the shares at "Market Outperform" with a price target of $15, which implies growth of nearly 64 percent over its closing price Tuesday of $9.15.
Oppenheimer & Co. analyst Bret Holley wrote that he believes that an acquisition of Cardiome is more likely than a partnership.
With this prospect, and our expectations for additional positive oral vernakalant data and Kynapid's approval in the near term, we believe additional appreciation in Cardiome is likely," he wrote.
Holley has an "Outperform" rating and $19 price target on shares, which suggests the stock price will more than double over the next year.
Shares of Cardiome were recently up 14 cents at $9.29, after falling as much as 3.3 percent earlier in the session.
