Tokos’ Stock Price Rebounds After Rebuttal : Study: Experts’ doubts on the pregnancy monitors had caused investor jitters. However, the Santa Ana firm’s defense of its product has buoyed prices.
Tokos Medical Corp.’s stock rose Thursday after the company responded to a report questioning whether monitoring devices like those used as part of the company’s prenatal services can prevent premature births.
Shares rose nearly 10% to close at $23.75 apiece, reassuring company officials and jittery investors after a rough-and-tumble week on Wall Street.
Word leaked out this week that eight members of a committee of the American College of Obstetricians and Gynecologists will release an opinion that the devices have not been shown to prevent premature births in high-risk pregnancies. The news sent Tokos’ stock tumbling to a 1992 low of $21.63 a share on Wednesday.
On Thursday, Tokos and Healthdyne Inc., a Marietta, Ga., company that provides similar services, called the report a “fundamental misunderstanding” of the monitoring device. In their response, the two companies, which provide home health care services for women with high-risk pregnancies, said that the committee’s opinion is irrelevant because the companies have never claimed that the monitoring device, on its own, prevents premature births.
The devices “cannot prevent pre-term birth any more than a thermometer can prevent infection,” Tokos and Healthdyne officials wrote.
Rather, “the device, the nurse, the drugs, the doctors and patient compliance, all taken together, have been shown to prolong pregnancies,” Robert F. Byrnes, Tokos’ chief executive officer, said in an interview Thursday. “For some reason the committee has decided to pick one piece of the services we offer.”
The opinion was virtually unchanged from one that the committee wrote in 1989, Tokos officials said. Late last year, the group also wrote an article for the New England Journal of Medicine questioning the product’s effectiveness, Byrnes said.
“There were some who came to the conclusion that the most recent study was based on new information,” Randall S. Huyser, a research analyst at Furman Selz Inc. in San Francisco, said of Tokos’ investors. “But this is not a change in positions.”
Although the monitoring device is still controversial in the medical community, Huyser said, it continues to gain acceptance among physicians and patients.
Tokos reported a record 49% increase in profits for the first half of the year. Revenue rose 41% to $73.5 million. Investors, however, have been skittish about health-care stocks in general, so the slightest bit of news can set off active selling in the financial markets.
Tokos’ stock fell at the end of July after a Canadian report suggested that a popular drug used to slow premature labor was ineffective and, in some cases, could have serious side effects. Although the drug is not distributed by Tokos, it is biochemically related to one often prescribed by physicians who use the company’s services.
The Canadian study, which focused on hospitalized women, showed that the drug did not stop labor once it began. But Tokos officials said that, by using their services, physicians can spot signs that labor is about to begin and then take steps to prevent it.
