HemaCare's stock plummets on first quarter earnings; ChondroGene prices C$20 million PIPE

By Sheri Kasprzak

New York, May 12 - HemaCare Corp. released its first-quarter earnings on Friday and watched its stock take a dive in the process.

The stock sank 27.43%, or 94 cents, to end the day at $2.489 (OTCBB: HEMA).

Even so, one sellside trader said the company is profitable and the drop is probably temporary.

"It's nothing to get overly excited about," he said. "They've been consistently profitable, so I would say there's no need to jump ship. I think the [biotech] sector in general is just slumping a bit and that's probably why [the stock fell]. I don't think it has much to do with the earnings."

The company reported revenue for the quarter of $8.187 million, up 15.6% from the $7.083 million in revenues reported for the first quarter of 2005. Net income for the first quarter of 2006 was $394,000 compared to a net income of $276,000 for the same period of 2005, an increase of 42.8%.

"The year has started well for HemaCare," said Judi Irving, HemaCare's chief, in a statement. "We continue to see improvement in blood services operations, top line growth in blood products and customer interest in research products. New leadership in Maine and our renewed focus on donor recruitment there, will address this under-performing operation. The installation of our document-control system is nearly completion and work to implement our new financial system will begin in the second quarter of 2006. We look forward to significant operating benefits from both of these systems."

Los Angeles-based HemaCare provides blood products to the healthcare sector.

In the broader market, one sellsider said that biotech slump is actually improving.

"I don't think we're quite out of the woods yet," he said. "But we're getting there. Some of the big names are improving and that will improve the smaller names. This is going to take some time. Yesterday, [biotech stocks] were off, but today they're up a bit."

Downsized BioMimetic edges higher

In primary market news, BioMimetic Therapeutics, Inc. managed to price its initial public offering of common stock - although well below the target range - and then saw its stock creep higher in trading.

The Franklin, Tenn.-based company sold 4.6 million at $8.00 per share, far below the target range of $11.00 to $13.00 although the number of shares was increased slightly from 4.5 million.

Its stock (Nasdaq: BMTI) finished the day higher by $0.25 or 3.13% at $8.25.

Deutsche Bank and Pacific Growth were bookrunners.

BioMimetic is focused on developing and commercializing drug-device combination products to repair orthopedic injuries to bone, cartilage, ligaments and tendons.

ChondroGene's PIPE

Moving to the private placement market, ChondroGene Ltd. priced C$20 million private placement, sending the stock down by more than 7.5%.

The placement, set to close May 25, includes up to 12.5 million shares at C$1.60 apiece.

Agent Westwind Partners Inc. has a greenshoe for up to 3,125,000 additional shares.

After the deal priced Friday morning, the stock sank by 7.69%, or 15 cents, to settle at C$1.80 (TSX Venture: CDG).

Proceeds will be used for the development and commercialization of ChondroGene's lead product ColonSentry, a blood test used to detect pre-cancerous polyps and colon cancer. The rest will be used for additional clinical development, as well as for general corporate purposes.

Toronto-based ChondroGene develops tests used to diagnose certain diseases using disease-specific biomarkers. The biomarkers are used to diagnose cancer, arthritis, cardiovascular disease and neurological disorders.

Barr's stock slips on rejected patent

Barr Pharmaceuticals, Inc.'s request for the reissue of its patent for oral contraceptive Seasonale was tentatively denied on Friday, shoving the company's stock down in the process.

The stock slipped 4.96%, or $2.66, on the day to end at $50.98 (NYSE: BRL).

On the same day, however, subsidiary Barr Laboratories, Inc. received a nod from the Food and Drug Administration to market its Isotretinoin capsules in the 30 mg strength. The drug is used to treat severe acne.

The product will be sold commercially under the Claravis trade name.

Located in Woodcliff Lake, N.J., Barr develops generic and proprietary pharmaceuticals.

Draxis's stock improves

Draxis Health Inc.'s stock made a slight comeback on Friday after the stock dropped more than 5% on Thursday following first-quarter earnings news.

The stock climbed 1.49%, or 6 cents, to end the day at $4.09 (Nasdaq: DRAX).

On Thursday, the company's stock took a hit on word that first-quarter consolidated revenues were down by 16% on the year.

After that news, the stock lost 5.18%, or 22 cents, to end at $4.03.

The improvement in stock was just as one sellside trader predicted on Thursday. That sellsider had noted that the drop in stock was because of the earnings news and noted that the stock would likely improve again.

Volume of the company's stock returned to normal on Friday with 39,158 shares traded, compared to the average 39,016. On Thursday, volume climbed with 48,975 shares traded compared to the 38,725 average.

Draxis, based in Mississagua, Ont., develops sterile lyophilized products, as well as radiopharmaceuticals, used to treat certain types of cancer.

Neurologix's stock slips 2.6%

A day after wrapping a $12 million PIPE, Neurologix, Inc.'s stock fell 2.63% on Friday.

The stock lost 5 cents to end the session at $1.85 (OTCBB: NRGX).

When the deal was closed Thursday, the stock advanced by 5.56%, or 10 cents, to close at $1.90.

In the placement, Neurologix sold shares of series C convertible preferred stock at $35.00 each to General Electric Pension Trust, the DaimlerChrysler Corp. Master Retirement Trust and funds managed by ProMed Management, Inc.

The preferreds are convertible into 19.66 common shares each.

Located in Fort Lee, N.J., Neurologix is a research and development company focused on treatments for brain and central nervous system disorders.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.