The stock market sheared 25 percent off the value of ImmunexCorp.'s shares on Thursday after the company announced thatit would post a loss instead of a profit for the first quarter andnot meet previous expectations for the year.
The Seattle company's stock (NASDAQ:IMNX) fell $10.50 to$31.50.
Immunex also said that it was suing co-marketing partnerHoechst AG and its subsidiaries Behringwerke AG and HoechstRoussel Pharmaceuticals Inc. for breach of contract, businessinterference and unfair competition in the marketing ofgranulocyte macrophage colony stimulating factor (GM-CSF).
The suit, filed in Superior Court of the State of Washington forKing County, alleges that the Hoechst subsidiaries acted toinjure Immunex by shipping at least 10,000 vials of HoechstGM-CSF as free samples to Immunex's hospital customers.
Immunex said the impact on its sales would result in a loss forthe first quarter, although significantly smaller than the $4.2million loss for the 1991 quarter.
"I think the market is reacting to a major disappointment," saidanalyst Peter Drake of Vector Securities International Inc. "Butthere is still long-term fundamental value here. Historically,the time to buy biotech stocks is when the blood is in thestreets."
Drake estimated that Immunex's Leukine sales will be held at1991 levels. He changed his 1992 projections to $35 million inLeukine sales from $55 million, and a 40 cent-per-share lossfrom a 50 cent profit. In 1991, Immunex sold $29.1 million ofthe white blood cell stimulator, plus $4.1 million of bulk toHoechst.
"Immunex had a much more pro-active, creative and effectivemarketing effort in 1991, and Hoechst was getting dramaticallybeaten in the U.S.," said Drake.
According to Immunex's complaint, Hoechst failed to marketGM-CSF as required by contract, failed to pay royalties, andinterfered with Immunex's contractual relations with itscustomers through product giveaways. Immunex also allegesthat it was injured through lost sales and profits due toHoechst's marketing practices.
"Immunex hasn't received any royalties on fourth-quartersales, and third-quarter royalties don't reflect actual sales,"said spokesman Jason Rubin. It's unclear how much productHoechst has sold compared to how much it has given away,Rubin said. Immunex is seeking an injunction to stop thealleged giveaway and unspecified damages.
Hoechst spokeswoman Andrea Stine said company policy is notto comment on litigation. Privately held Hoechst doesn't releasesales figures.
Immunex had hoped to negotiate an agreement to supplyBehringwerke with GM-CSF for the European market, Rubinsaid. "They appear to have been unresponsive to our efforts toresolve these and other issues." Behringwerke filed inNovember for European marketing approval.
The company is also seeking to rescind Behringwerke's licenseto market Immunex's receptor products in Europe and Japan.The license is part of the 1989 contract in which Immunex gotthe right to co-market GM-CSF in the United States.
"If they're in breach of the contract, it's appropriate that werescind that contract," Rubin said.
INDEX CLOBBERED BY IMMUNEX WOES
The sell-off of Immunex Corp. shares on Thursday helped pushdown the AMEX Biotechnology Index by 12.1 points, or nearly7 percent, to 164.72.
-- Karen Bernstein BioWorld Staff
(c) 1997 American Health Consultants. All rights reserved.