Bausch & Lomb stock sinks after buyback offering to avoid default; ImmunoGen stock up on earnings

By Sheri Kasprzak and Kenneth Lim

New York, May 4 - Bausch & Lomb Inc. watched its stock tank on Thursday as the company offered to buy back debt in an effort to avoid default for filing financial statements late.

The stock fell $2.78, or 6.32%, to close at $41.19, losing another 8 cents in after-hours trading (NYSE: BOL) when the eye-care company announced the tender offer for $384 million in debt and $160 million in convertible debt.

Bausch has not yet filed its financials for 2005.

The offer would, ostensibly, give the company until Oct. 2 to bring its financial filing in order.

"On a net debt basis, they're going to spend the cash on the debt, so their net debt isn't really going to change that much," said one sellside convertible analyst. "Cash on hand would go down by $300 million to $400 million, but they're pouring around $100 million EBITDA on the books every quarter" based on past figures.

"They're a big company with a lot of products," the analyst continued. "It sucks for the stock, but the company was not levered to start out with and therefore it has a lot of room before you'd say there was a credit crunch here. On a net debt basis, it doesn't really change. If people are really freaked out, I would certainly say take the tender offer. They should have the consents that they need."

Meanwhile, the company's 5.31% floating-rate convertible due 2023 improved to dollar-neutral to 111.5 bid, 112 offered versus $41.25.

"These bonds got a lot better today," said one sellside trader. "A lot of these names, I think the market is so starved for volatility that any name where the stocks crash, especially when it's a decent credit like Bausch & Lomb, guys just chase after it. There's been significant fallout in Bausch & Lomb, and people are buying on expectation of more volatility in the future."

In fact, the volume of Bausch's traded shares jumped to 11,853,000 shares traded, compared to the average 2,776,270 shares.

ImmunoGen stock climbs

Elsewhere in biotech Thursday, ImmunoGen, Inc. saw its stock advance by 5.45%, or 22 cents, to end at $4.26 (Nasdaq: IMGN).

The jump comes after the company reported its first-quarter earnings.

ImmunoGen reported a net loss of $3 million for the quarter ended March 31, compared with a net loss of $3.6 million for the same quarter of 2005. During the nine months ended March 31, the company sustained a net loss of $11.2 million. For the same period of 2005, the company reported a net loss of $8.2 million.

For the quarter, ImmunoGen reported net revenue of $9.4 million, compared with $10.2 million for the first quarter of 2005.

Currently, Genentech Inc. is developing ImmunoGen's Trastuzumab-DM1 product in a phase 1 trials for metastic breast cancer.

Cambridge, Mass.-based ImmunoGen develops anticancer therapeutics using its tumor-activated prodrug technology.

Another winner in biotech Thursday was GPC Biotech AG, posting a 5.45% gain of 22 cents to finish the day at $16.26 (Nasdaq: GPCB) after announcing its first quarter earnings.

"It's a good time to hold," said one trader when asked about the stunningly low volume of GPC shares traded Thursday. "Folks are doing exactly that. There's not a lot of trading going on with this one and that's exactly how it should be, if you ask me."

The trader said GPC posted strong earnings and volume may take off later in the week.

"With earnings, you kind of wait to see where things go," he said. "It'll pick back up."

Only 458 shares of GPC were traded on Thursday compared to the average 2,998 shares.

CryoCor stock gains 4.3%

In other earnings news, CryoCor, Inc.'s stock climbed 4.26%, or a dime, to end the day at $2.45 (Nasdaq: CRYO) after announcing a net loss of $4.3 million for the quarter ended March 31, compared with a net loss of $5 million net loss for the same quarter of 2005.

CryoCor received revenues of $113,000 for the quarter, compared with $329,000 for the same quarter of 2005.

San Diego-based CryoCor develops medical devices used to treat cardiac arrhythmia.

Incyte stock slips

Among the losers in biotech during Thursday's round of earnings reports was Incyte Corp., which posted a loss in stock trading Thursday of 4 cents, or 0.96%, to close at $4.21 (Nasdaq: INCY).

For the first quarter, Incyte reported revenues of $6.5 million, compared with $2.9 million for the first quarter of 2005.

The net loss for the quarter was $17.3 million. For the same quarter of 2005, Incyte posted a net loss of $20.1 million.

Incyte incurred $24.8 million in research and development expenses for the quarter, compared with $17.8 million for the first quarter of 2005.

Incyte, based in Wilmington, Del., develops treatments for cancer, inflammation, HIV and diabetes.

A major loser following its earnings report was Salix Pharmaceuticals, Ltd.

Salix's stock plummeted 10.95%, or $1.52, to end the day at $12.36 (Nasdaq: SLXP) after announcing net income of $3.7 million for the first quarter. For the same quarter of 2005, the company reported net income of $3.4 million.

Salix is a Raleigh, N.C., pharmaceutical company.

Adeza Biomedical Corp. stock also dropped on Thursday, losing 7.84%, or $1.37, to close at $16.11 (Nasdaq: ADZA).

The company reported net income of $6,000 for the first quarter, compared with net income of $1.5 million for the same quarter of 2005.

Sunnyvale, Calif.-based Adeza develops treatments for gastrointestinal disorders.

Elsewhere, Haemonetics Corp.'s stock dipped 4.85%, or $2.68, to close at $51.57 (NYSE: HAE) after announcing net revenue of $110 million for the fourth quarter of 2005 and net revenue of $420 million for the year ended 2005.

Operating expenses for the fourth quarter of 2005 were $35 million down from $38 million for the same quarter of 2004.

Located in Braintree, Mass., Haemonetics manufactures automated blood-processing systems.

Adherex stock slips on $6.46 million deal

Adherex Technologies Inc.'s stock fell by more than 4% on Thursday on word that the company will close a $6,468,000 private placement on May 8.

The stock dropped 4.3%, or 4 cents, to settle at $0.89 (Amex: ADH).

The company will issue 7.7 million units at $0.84 each to mostly new institutional investors.

The units include one share and one third-share warrant. The whole warrants allow for the purchase of another share at $0.97 each for four years.

The deal is slated to close May 8.

"We have done work on ADH and are not fans of eniluracil," said one buysider familiar with Adherex. "I knew the ADH deal was happening, but not sure who invested."

Adherex, located in Research Triangle Park, N.C., is a biopharmaceutical company focused on developing treatments for cancer. Its lead compound, ADH-1, selectively targets a protein found in some tumor cells and established blood vessels that feel solid tumors.

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