Artes Medical shares fall after qtrly results, broker downgrades
Nov 14 (Reuters) - Shares of Artes Medical Inc ARTE.O fell to their year-low on Wednesday, a day after the medical technology company posted weak quarterly product sales, which prompted analysts to temper their view on the stock.
For the third quarter, the company posted revenue of $6.7 million, including a one-time royalty settlement payment of $5.5 million from BioForm Medical Inc.
Sales of ArteFill, its injectable dermal filler for the correction of "smile line" wrinkles, stood at $1.2 million. Analysts were expecting revenue of $3.8 million, according to Reuters Estimates.
"While we continue to believe that ArteFill will be adopted more broadly over the next several years, the sales ramp is clearly behind our most recent assumptions," Cowen and Co analyst Sara Michelmore wrote in a note to clients.
Michelmore downgraded the stock to "neutral," saying more time and money were needed to catapult ArteFill. Gregory Simpson, an analyst with Stifel Nicolaus, said Allergan Inc (AGN.N: Cotización) has been aggressive in the launch of its Juvederm temporary dermal filler product, which appears to have been a major issue in the slow uptake of ArteFill.
The tepid revenue ramp to-date raises concerns over Artes' ability to compete against the larger players in the dermal filler market, especially in light of the very aggressive marketing strategies on the part of these companies, Simpson said.
Simpson lowered his rating on the company to "hold" from "buy." Lazard Capital, which lowered its 2008 and 2009 forecast to account for slower revenue ramp, cut its price target to $8 from $14 on the stock.
Shares of the company were down more than 27 percent at $2.25 in morning trade, making them the top loser on the Nasdaq. They had touched a new 52-week low of $2.24 earlier. (Reporting by Sreerupa Mitra in Bangalore; Editing by Deepak Kannan)
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