PharmaPrint Stock Takes Dive
PharmaPrint Inc. stock lost 35% of its value amid heavy trading Thursday, a day after its only major customer, drug maker American Home Products Corp., said it plans to stop doing business with the money-losing company.
Shares in Irvine-based PharmaPrint plunged to their lowest point in the past 12 months, losing 63 cents a share to close Thursday at $1.16. About 2.8 million shares changed hands--more than 15 times the three-month daily average.
At one point, the stock had slumped to 88 cents a share, a far cry from its 12-month high last February of $14.88.
Under their contract, PharmaPrint makes herbal supplements that American Home sells under its Centrum brand. American Home last month gave PharmaPrint one-year notice that it intends to end that agreement.
PharmaPrint said it has stopped shipping the supplements to American Home because it learned that the drug maker was using PharmaPrint trade secrets to develop new products.
“There was never an intention to honor this agreement,” PharmaPrint Chief Executive C. Richard Piazza said. “There was always the intention to compromise this company and take the technology.”
PharmaPrint filed suit Tuesday, asking a California court to block American Home from selling products that PharmaPrint alleges were developed through improperly obtained information.
American Home also filed a lawsuit against PharmaPrint on Nov. 8 in Newark, N.J., accusing PharmaPrint of failing to live up to the terms of the agreement. It also complained that PharmaPrint falsely accused the it of “misappropriating” technology to develop new products.
Troubles in the relationship have had an impact on PharmaPrint’s results. American Home cut back on orders during the company’s fiscal second quarter, which ended in September, Piazza said.
PharmaPrint’s revenue for that quarter fell to $590,000 from $4 million in last year’s second quarter. It lost $6.6 million, or 48 cents a share, more than double the 22-cent loss expected by the one analyst that had submitted a forecast to First Call Corp.
