Why XenoPort Shares Stumbled

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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 XenoPort (UNKNOWN: XNPT.DL  ) , a biopharmaceutical company focused on treating neurological disorders, shed as much as 13% following the release of its fourth-quarter earnings results.

So what: For the quarter, XenoPort reported $0.5 million in total revenue compared to $5.1 million in the year-ago period. However, due to a non-cash gain resulting from resolved litigation with GlaxoSmithKline (NYSE: GSK  )  -- prior to this quarter, Glaxo and XenoPort had a collaboration agreement for the sale of Horizant extended-release tablets -- XenoPort turned in a $3 million profit, or $0.07 per share.

Now what: I believe a lot of today's pessimism revolves around investor concern over whether XenoPort can effectively commercialize Horizant without a large collaborative partner. Given that sales of the drug totaled just $2.1 million in the fourth quarter, according to Glaxo's recorded figures, I can't exactly say that things look all too promising. Furthermore, XenoPort announced that it plans to use $100 million to $110 million in cash just in 2013, and it only ended the year with $139 million in cash and cash equivalents. I sense a big dilutive offering potentially on the way either next year or in 2014.

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  • Report this Comment On March 13, 2013, at 9:57 AM, Wmjack50 wrote:

    the real value of xnpt is in it's pipeline and the likely hood that a buy out can happen as drug 829 proves itself better than BIIG's BG12

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Related Tickers

12/31/1969 7:00 PM
XNPT.DL $0.00 Down +0.00 +0.00%
XenoPort CAPS Rating: ***
GSK $43.42 Down -0.16 -0.37%
GlaxoSmithKline CAPS Rating: ***