FDA’s Delay in Approving Laser Spurs Selloff of Trimedyne Stock : Technology: The innovation would treat enlarged prostate glands. Shares fall 10%.
Shares in Trimedyne Inc. fell nearly 10% in heavy trading Tuesday after the maker of surgical lasers announced that the U.S. Food and Drug Administration is delaying approval of a new laser for treating enlarged prostate glands.
The selloff of Trimedyne stock came after the company announced that the FDA was postponing a decision on its Urolase device until researchers rework some data included in the company’s voluminous application.
“At least we don’t have to start from square one,” said Trimedyne spokeswoman Kathy Price. “They just want us to clarify the information that is already in the documents.”
Nevertheless, some shareholders lost confidence in the company, sending the stock down $1.25 on the Nasdaq market, to close at $12.875 a share on volume of 721,400 shares--more than four times the normal trading volume.
Market jitters forced company officials to fend off a barrage of phone calls from investors concerned about the future of Urolase, which could increase the company’s annual revenue by several million dollars. It is estimated that nearly half of American men over 55 suffer from enlarged prostate glands.
The application, originally submitted in July, 1993, still needs to undergo scrutiny by a panel of urologists before receiving final approval. That process, even without the delay, could take until the end of the year to complete.
“We’re actually encouraged that the FDA is paying so much attention to detail,” Price said. “When we’re done, the technology will be airtight.”
David Anast, publisher of the Biomedical Market Newsletter in Costa Mesa, suggested that shareholders acted hastily on Tuesday.
He said an FDA request for additional information during the review process is routine and does not mean that the prostate laser’s application will probably be rejected.
“It’s unfortunate that the investment community has regressed to the point that if instant approval is not received, then the product or company is branded as a disappointment,” Anast said. “That can’t be further from the truth.”
The FDA, Anast said, routinely asks for information not found in applications or demands that information already included in an application be restated.
In Trimedyne’s case, further delay appears to be minimal if the company can quickly provide the additional data.
The Urolase device is being jointly developed by Trimedyne and C.R. Bard Inc., a medical supplies distributor in Georgia. The partnership suffered a setback in December when FDA officials held off the company’s presentation to the panel of experts.
Price said the repeated delays have not dampened enthusiasm for a device designed to help men who suffer from enlarged prostates.
“There has and will be a great deal of expectation for this approval,” Price said. “Wall Street expectations are high. . . . Any blip will get an extraordinary amount of attention.”
