Another solid quarter for NxStage Medical news

Investors declined to reward NxStage Medical (NSDQ:NXTM) today for another in a string of solid quarters, sending share prices down YY% despite higher sales, narrowed losses and re-affirmed guidance.

The Lawrence, Mass.-based home hemodialysis device maker posted losses of $5.1 million, or 9¢ per share, on sales of $57.0 million during the 3 months ended March 31, in-line with analysts’ expectations and its own guidance.

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Wall Street, however, was unfazed – NXTM shares closed at $16.24, down 3.3% on the day.

That might be due to news that Asahi Kasei (TYO:3407), which closed a $2.2 billion takeover of NxStage neighbor Zoll Medical (NSDQ:ZOLL), converted its entire $45.2 million worth of debt into equity at $18.41 per share. That makes for nearly 2.5 million shares, or about a 4.6% stake in NxStage – perhaps enough to spark fears of a sell-off on The Street.

During a conference call with investors, CEO Jeffrey Burbank declined to say whether there’s a "lock-up" provision to the deal that would prevent Asahi from dumping its stake for a certain period, but said he’s confident that the Japanese company is in it for the long haul. The 2 companies inked a distribution deal in 2009 that gave NxStage a much-needed $40 million boost.

"We signed a strategic agreement with Asahi in 2009 that covered a number of different more operational-focused things, and they were there for us at a time when our share price was very low and we needed access to capital to keep driving towards our vision," Burbank said during the call. "They like our strategic clients obviously, because they are willing to take an equity position at this time, they have confidence in us, so we’re moving forward on that basis. I think it is just an evolution of a great partnership.

"We can’t speak to their intentions, but we are long-term partners, so I don’t see it as something where we’re working against each other," he said.

Asahi Kasei and NxStage are also working together to "develop the Japanese market opportunity" for System One, NXTM’s home hemodialysis system, according to a press release.

NxStage said it expects to post losses of $5.0 million to $6.0 million, or 9¢-10¢ per share, on sales of $57 million to $58 million during the 2nd quarter. The company reiterated its prior full-year guidance, saying it still expects to see losses of between $14.0 million and $18.0 million, or 25¢-32¢ per share, on sales of between $240 million and $245 million.

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