PLYMOUTH, Minnesota — Cardiology device maker ATS Medical Inc. saw its stock plummet 18 percent in early afternoon trading Tuesday, a day after the company announced that it expects losses for the fourth quarter and full year of 2009.
The company blamed the worse-than-expected projections on slow growth in its heart valve and heart surgery businesses, according to a statement. Its share price had fallen to $2.65 early Tuesday afternoon after closing the prior day at $3.24.
ATS said it expects to post a fourth-quarter loss on sales between $18.4 million and $18.8 million. Analysts had expected ATS to break even in the quarter on revenue of about $21 million.
ATS had earlier projected that it would break even or post a slight increase in earnings for the quarter.
“In the fourth quarter we experienced an unexpected slowdown in growth for our legacy businesses, namely mechanical heart valves and CryoMaze surgical ablation products,” CEO Michael Dale said in the statement.
ATS also downwardly revised its full-year revenue projections to between $75.4 million and $75.8 million. Analysts had been expecting about $78 million.
The company said it expects sales to pick up in the second half of this year as it expands the rollout of its 3f Enable sutureless heart valve, which recently received European regulatory clearance.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
ATS has not set a date for when it will release its fourth-quarter and full-year financial information. The company expects to announce a date for its release in mid-February, according to the statement.
Until Monday’s announcement, 2009 had been shaping up nicely for ATS. For the year’s first nine months, the company said sales jumped 19.2 percent to $57 million from $48 million during the same period of the prior year. During that time, ATS also narrowed its operating loss to $962,000 from $9.2 million.
