O.C. Biomeds Take Turn for the Better
Stocks in Orange County biomedical companies, pummeled for much of last year, are picking up steam as the overall market for biomedical stocks had been charging ahead.
Shares of VitalCom Inc., which nearly doubled on Friday, continued to rise Monday on news of the Tustin company’s products that allow physicians to monitor their patients’ vital signs over the Internet.
Analysts say VitalCom, as well as scores of others, are benefiting from a late 1999 surge of investor exuberance for biotechnology stocks, a sector that has long been overshadowed by computer technology and Internet stocks.
Cortex Pharmaceuticals Inc., which on Monday posted a $423,000 loss for its fiscal second quarter, still saw its stock increase 35% largely on Friday’s news that the Irvine drug maker had picked up a patent for a sexual dysfunction treatment.
Nexell Therapeutics Inc. rose 37% Monday, essentially on no recent news from the Irvine developer of cell separation technologies.
Cancer treatment developer Techniclone Corp. in Tustin and health-care software maker TriZetto Group Inc. in Newport Beach hit 52-week highs Monday. Techniclone added 25 cents to close at $4.47 a share, while TriZetto gained $5 to close at $69 a share.
With soaring share prices for public companies, analysts predict the end of a long drought in initial stock offerings as a middle tier of biomedical firms gets ready to take off.
According to Prudential Securities analyst Caroline Copithorne, 11 biotechs have filed already this year to make initial public offerings. That compares with 11 biotech companies for all of last year.
Until then, say analysts, Wall Street will continue its infatuation with biotech--particularly companies in the genetics fields.
“Our stock has been moving up since the beginning of the year,” driven by the market’s interest in the biotechnology sector, said William Albright, Nexell’s chief financial officer.
In July, Nexell received Food and Drug Administration approval for U.S. marketing of a cell-selection instrument for use in conjunction with high-dose chemotherapy treatments. That makes the company “a commercial story,” though still in an early stage, Albright said.
Nexell’s stock gained $1.44 a share to close at $5.31.
A VitalCom spokeswoman said news about its software products seems to be driving the stock up.
“VitalCom has been fairly quiet and has had limited exposure to a lot of people,” she said. “This may have created more awareness, which would drive up interest and could impact the stock.”
A trader who did not want to be identified said that no institutions are trading VitalCom.
VitalCom’s software allows remote access to information from different manufacturers’ monitoring devices through the Internet rather than telephone lines. It enables a physician to monitor a patient’s information such as heart rate, from his or her office or home, in real time.
The company’s shares picked up 13 cents each Monday to close at $5 a share.
The patent that Cortex earned covers a company product as well as compounds made by others that are useful for treating sexual dysfunction. Research conducted at UC Irvine, the company said, showed that treating elderly rodents with a Cortex product resulted in improved sexual performance in a battery of standard animal tests for sexual function.
Unlike such pills as Viagra, Cortex’s Ampakine is aimed at restoring sexual drive.
The company’s shares gained $1.16 Monday to close at $4.47 a share.
Cortex’s loss, which amounts to 3 cents a share, was in line with expectations for the quarter ended Dec. 31. The company lost $946,000, or 8 cents a share, in the previous year’s second quarter. The company had sales of $991,000 for the quarter; none for the previous year’s second quarter.
