(Adds analyst’s comments, updates share movement)
By Sreerupa Mitra
BANGALORE, March 3 (Reuters) - Stereotaxis Inc STXS.O posted a wider-than-expected quarterly loss and said a Johnson and Johnson (JNJ.N) unit will delay marketing the medical device maker’s catheter to treat irregular heartbeats, sending its shares down to a lifetime low.
Given the marketing delay, Stereotaxis said it is not in a position to provide outlook for 2008, but added that it would be better positioned to achieve profitability in 2009.
“The company is relying on Johnson and Johnson for the product and is hoping it will drive its sales. So, if the catheter is not available, it is likely to have a negative impact on Stereotaxis’ sales,” Collins Stewart analyst Keay Nakae said.
Stereotaxis’ said its partner J&J will temporarily halt procedures done with the magnetic irrigated catheters and will delay full commercialization due to issues with product specifications.
An external evaluation of the catheter, which is used to treat the heart condition known as complex arrhythmia, found that a small number of the devices exhibited signs of char or coagulum formation, CEO Bevil Hogg said in a statement.
“Although it is our observation that changes in temperature setting and saline flow have largely resolved this issue in the clinical setting, our catheter partner has advised us that these characteristics are inconsistent with the product specifications,” Hogg added.
Analyst Nakae, who has a “buy” rating on the stock, expects J&J to launch the product by the third quarter.
The St. Louis-based company posted a fourth-quarter net loss of $12.2 million, or 34 cents a share, compared with a net loss $6.2 million, or 18 cents a share, a year ago.
Analysts on average were expecting a loss of 31 cents a share, before special items, according to Reuters Estimates.
Stereotaxis, which makes and markets cardiology instrument control systems, posted a 27 percent drop in revenue to $10.3 million, which was in line with analysts’ average estimate.
Revenue was hurt mainly by a delay in European and U.S. regulatory approvals for its magnetic irrigated catheter, the company said in a statement.
Stereotaxis shares were down $1.84 at $3.93 in late afternoon trade, making them the highest percentage loser on Nasdaq. They touched a lifetime low of $3.62 earlier in the session. (Editing by Himani Sarkar)