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Nexell Stock Tumbles 37% as 4th-Quarter Losses Grow

Earnings: Biotech company pins loss on expenditures connected with introduction of blood-filtering system.

March 31, 2000|From Bloomberg News

Shares of Nexell Therapeutics Inc. fell 37% Thursday after the company said its fourth-quarter losses widened, largely from expenditures to introduce a product in the U.S.

Nexell's stock fell $2.44 to $4.19 after the Irvine biotechnology company said its fourth-quarter losses grew to $9.9 million, or 14 cents a share from $6.3 million, or 9 cents a share during the same period in 1998. The stock had traded as high as $16.75 early this month. Revenue climbed 30% to $5.6 million.

Nexell, which develops and markets cell therapies for cancer and other diseases, also announced it plans a 1-for-4 reverse stock split, reducing the number of outstanding shares to 18 million from 73 million.

The company reported that operating expenses increased 57% to $11.1 million during its fourth quarter as it moved to introduce its Isolex 300i magnetic cell selection system in the U.S. The Isolex system, the company's lead product, won U.S. Food and Drug Administration approval last July.

The Isolex system filters a patient's blood and culls out a certain kind of building block cell, known as a stem cell, to be reinfused into the bloodstream following high-dose chemotherapy to treat cancer. Stem cells help the body recover from the effects of chemotherapy, which can devastate a patient's immune system.

L. William McIntosh, president and chief operating officer, said the company's move to rebuild its sales teams in the United States and Europe also added to expenses.

For the year, Nexell posted a loss of $40.1 million, or 56 cents a share, compared with a loss of $39 million, or 58 cents a share, in 1998. Revenue rose 12% to $15 million.

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