NEW YORK -- Shares of Optimer Pharmaceuticals tumbled 6 percent Tuesday as Wall Street weighed in on the company's marketing strategy and sales of its antibacterial drug Dificid.
THE SPARK: Optimer held a conference call with analysts and investors on Monday and explained that it plans to cut the price of Dificid for hospitals by 25 percent. The company said Dificid is effective but hospitals have been deterred from using the drug because of its high cost, and the price cut will help its sales.
On Tuesday Oppenheimer & Co. analyst Christopher Holterhoff downgraded Optimer shares to "Perform" from "Outperform," and said he is not convinced the plan will work.
"We would need to see consistent growth for institutional scripts in order to be convinced of the strategy," Holterhoff wrote. He also said growth in Dificid prescriptions has been weak and the company's third-quarter sales did not meet his expectations.
THE BIG PICTURE: Dificid is a treatment for Clostridium difficile, an infection that usually affects older patients and can cause symptoms ranging from diarrhea to potentially life-threatening inflammation of the colon. The Food and Drug Administration approved the drug in May 2011, and Optimer said net sales totaled about $51 million in the first year after approval.
Optimer says the wholesale acquisition cost of Dificid is $2,800 for a 10-day course of treatment, or $280 per day, although patients in the hospital usually do not take the drug for the full 10 days. The discount lowers the price of Dificid to $210 per day for hospitals.
On Monday the company said gross sales of Dicifid to U.S. wholesalers totaled $18.4 million in the third quarter, up from $18 million in the second quarter.
Dificid is also approved in Europe and is sold through a partnership with Japanese drugmaker Astellas Pharma. The drug received marketing approval in Canada earlier this year.
SHARE ACTION: Shares of Optimer Pharmaceuticals Inc. lost 70 cents to $10.76 in afternoon trading. The shares fell 3 percent Monday and are down 26 percent from their closing price on Sept. 17.