Immunomedics Corp. reported that the FDA would not approve itsproduct, and its stock took a dive. Molecular Biosystems Inc. reportedthat its product has been declared approvable _ the first of its kind toachieve this status _ and its stock took a dive.In these troubled economic times for biotech companies, it seems hardto tell which way is up.On Thursday, Molecular Biosystems felt obliged to put out a pressrelease stating that the company was not aware of any reasons orcircumstances that would account for the recent unusual tradingactivity in its stock. Its flagship product, Albunex, a contrast imagingagent for use with ultrasound, received preliminary marketing approvalfrom the FDA on April 28 _ becoming the first agent of this type to beapproved. The approval was conditional on revisions in labeling andperformance of additional studies after final approval.Since then, the company's shares have dropped 35 percent. Thecompany's shares, which reached a high of $27.63 in the most recent52-week period, had dropped to $11.63 Wednesday _ a new low forthe period, with 1.3 million shares traded.In a teleconference last Thursday with Peter Drake, a biotech analystwith Vector Securities Inc., of Deerfield, Ill., who has followedMolecular Biosystems for 10 years, the company fielded questionsfrom biotech analysts in an effort to bolster the value of its stock.The teleconference coincided with a "buy" recommendation fromDrake for Molecular Biosystem's shares. "Our view," Drake stated, "isthat MB is poised for revenue and earnings growth based upon sales ofAlbunex by the company's international marketing partners. Moreover,the company stands to expand its product pipeline with two additionalproducts expected to enter the clinic in the next 12 months."Kenneth Widder, chairman and CEO of San Diego-based Molecular,told his audience that the company has already responded to the FDA'sconcerns and is now awaiting final approval. He said the companyhopes to receive this in the next few weeks. If so, the product will belaunched by Mallinckrodt Medical Inc., a division of MallinckrodtGroup Inc. of St. Louis (NYSE:MKG), at the annual meeting of theAmerican Society of Echocardiography in San Francisco next month.Analysts participating in the teleconference expressed two mainconcerns: the slow start to market Albunex in Japan and the threat ofrival products such as imaging agents under development by ScheringAG of Germany and Sonus Pharmaceuticals Inc. of Seattle.Widder attributed the slow start in Japan, where the product is beingdistributed by Shionogi and Co. Ltd., to the need to train both its salesforce and echocardiologists in the use of Albunex. "It's a new kind ofproduct, " Widder told BioWorld. "The same thing happened whenmagnetic resonance imaging was introduced."Widder said the product was launched in Japan in the middle of thebudget year, making it difficult for some hospitals to buy it until thenext budget cycle begins. Nevertheless, he said there has been a"dramatic increase" in the number of repeat orders and the companyhas thousands of customers.He said Schering and Sonus's products are still years away from beingmarketed in the U.S.Although Albunex is expected to be approved only for delineatingendocardial border definition in cases of sub-optimal echoes, Widdersaid he believed it would also be useful in a stress-echo setting. He saidthe company has done stress-echo studies in 30 patients and "the datalooked extremely good."Whether in response to the teleconference or to other factors,Molecular Biosystems (NYSE:MB) stock rose Thursday, closing at$12.63, up 75 cents. The company continued its upward trend Friday,closing at $12.75, up 13 cents.
-- Philippa Maister
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