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 biopharma company Savient Pharmaceuticals (Nasdaq: SVNT ) got clobbered by Mr. Market today, shedding as much as 15% in intraday trading on heavier-than-average volume.
So what: Savient released its first-quarter results after the market's close yesterday, and investors obviously don't like what they saw. Though the company's net loss widened less than expected -- to $0.19 as compared with estimates of $0.31 -- sales of $1.3 million were well short of the $2.1 million that Wall Street expected.
Now what: Investors may have been looking for bigger things from the quarter because of the recent launch of the company's gout treatment Krystexxa. However, it appears that there may have been some hiccups early on, including concerns over Medicare billing because of the drug's being currently billed under a "miscellaneous" code for Medicare reimbursement. The company expects to get a permanent code for the drug early next year and sees that move as a catalyst to ramp up sales. But that may be small comfort for investors, who no doubt want to start seeing sales ramp up now. Meanwhile, permanent billing code or not, sales and marketing expenses jumped as the company put feet on the street to start selling Krystexxa.
This may be all the more concerning for investors who are hoping for a bigger pharma player to step in and buy Savient at a nice premium. Unless Krystexxa can show some solid traction, those hopes may start to dim.
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