Why Optimer Pharmaceuticals Shares Sank
May 10th 2013 1:48PM
Updated May 10th 2013 2:55PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biopharmaceutical company Optimer Pharmaceuticals shed as much as 16% after the company reported disappointing first-quarter results.
So what: For the quarter, Optimer delivered a 35% increase in revenue to $19.4 million as sales of its Clostridium difficile-associated diarrhea drug Dificid rose to $16.8 million from $14.4 million in the year-ago period. Net loss per share widened significantly to $0.65 from $0.23 per share in the previous year. Wall Street had been expecting Optimer to report a smaller loss of $0.46 per share on revenue of $21.3 million.
Now what: And investors are expecting a high premium for these results? Optimer has made no qualms about potentially putting itself up for sale, and rumors have been flying that it could command as much as $1 billion. However, following today's results, potential buyers are going to see that Dificid sales aren't growing nearly as fast as anyone expected and that Optimer is incredibly pricey relative to the peak sales potential of its lone FDA-approved drug. This remains a biopharmaceutical company I would highly suggest keeping your distance from.
Craving more input? Start by adding Optimer Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.
While you can certainly make huge gains in biotechs like Optimer, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
The article Why Optimer Pharmaceuticals Shares Sank originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.