Shares of Delcath Systems, Inc. tanked nearly 20% to $3.73 following its 1-to-16 reverse stock split, which came into effect yesterday. According to an SEC filing, the stock split trimmed Delcath shares to roughly 9.4 million from 150.9 million.
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Delcath has been going through a rough patch after it failed to win approval from U.S. Food and Drug Administration (FDA) for its Melblez liver cancer therapy device. FDA determined that the risks associated with the company’s Melblez device are higher than the benefits for patients with unresectable ocular melanoma metastatic to the liver.
In Oct last year, Delcath’s shares turned red after the announcement of raising about $7.5 million through sales of common stock. The New York-based medical device maker also announced several layoffs as part of its restructuring plan.
However, Delcath’s financial results for the 2013-fourth quarter showed improvement. The company posted a narrower loss of 4 cents per share for the quarter compared with 14 cents in the fourth quarter of 2012 as well as the Zacks Consensus Estimate of a loss of 5 cents per share. Revenues in the quarter surged 69% to $338 million.
Operating expenses dipped 52% to $5.8 million from $12.0 million for the fourth quarter of 2012. The decline is primarily attributable to a significant reduction in expenses related to the company's NDA submission to the FDA, as well as the cost reduction measures.
Operating loss was narrower at $5.5 million (including non-cash stock-based compensation income of $0.3 million) compared with $11.8 million (including $0.9 million in non-cash stock-based compensation expense) for the fourth quarter of 2012.
Currently, Delcath retains a Zacks Rank #1 (Strong Buy). Other players in the medical instruments industry that are also worth a look include Cynosure, Inc. , Syneron Medical Ltd. , and DexCom, Inc. (DXCM - Free Report) . Cynosure and Syneron Medical sport a Zacks Rank #1 (Strong Buy), while DexCom carries a Zacks Rank #2 (Buy).