The equity market is quite unforgiving, at least this is what La Jolla Pharmaceutical Company (NASDAQ:LJPC) must be thinking. While outlining recent progress in corporate business as well as essential objectives, La Jolla revised down revenue guidance for FY2019. Interestingly, the guidance sparked a downward spiral of the firm’s stock. Notably, the share price tumbles 44% in a single day of trade.
GIAPREZA lacks wide approval
Notably, the negative revenue guidance stems from poor sales for its flagship drug, GIAPREZA. Launched in March 2018, the drug helps to regulate blood pressure in patients suffering from disruptive shock. Interestingly, the firm is yet to report impressive sales numbers from the drug. However, commentators urge caution since the drug lacks wide approval.
According to the corporate update provided earlier, the firm revealed that the drug could get approval in Europe soon. As per the firm, the decision regarding the application for Marketing Authorization Application (MAA) for GIAPREZA will come out in June. Notably, the European Medicines Agency (EMA) is the agency with authority to give the nod.
Meanwhile, the drug is fighting hard for market share in other markets. The reception might not be at the expected level, but there are already people using the drug. Notably, the fourth quarter saw La Jolla reported increased sales of the drug by about 20%.
Initiatives towards increased adoption
Interestingly, Dr. George Tidmarsh President and CEO of La Jolla revealed that they have plans in place to push sales. Specifically, the initiatives target this year as it will be crucial to the outcomes of other projects under investigation. Mainly, Tidmarsh expressed his certainty that the drug has great potential to help patients.
“We have a number of initiatives that we believe will support its continued, increased adoption in 2019,” Tidmarsh said commenting on the disappointing sales.
Meanwhile, commentators argue that it will be some time before La Jolla gains the $22 value its share held back in September. However, continued effort in pushing GIAPREZA might change the direction of the stock for the new financial year. Meantime, the stock might continue to tumble due to other reasons like subdued demand.