Another solid quarter for NxStage Medical

May 8, 2012 by MassDevice staff

NxStage Medical posts a double-digit top-line increase and narrows its 1st-quarter losses but closes down more than 3%, possibly due to a debt-to-equity swap by Asahi Kasei.

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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.

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