Lake Forest-based medical scanning provider InSight Health Services Corp. saw lower revenue and earnings before interest, taxes and other items for the quarter ended June 30, its first results since re-emerging in August from a three-month bankruptcy reorganization.
The company, which runs more than 200 medical imaging centers and mobile units that call on hospitals and doctors’ offices, continues to face a “challenging” market, Chief Executive Bret Jorgensen said.
InSight and other medical scanning providers are being squeezed by cuts in federal funding for services as well as pressure from insurers for lower prices.
The company’s revenue fell 5.6% to $71 million in the June quarter from a year earlier. Earnings before interest, taxes, depreciation and amortization, which InSight considers a better reflection of its operations, dropped 20% to $12.8 million.
The company narrowed its net loss to $32 million from $187 million a year earlier.
InSight feels it can compete in a tough market after its reorganization, Jorgensen said. The May filing centered on a plan to trade 90% of the company’s common stock to bondholders, who in turn forgave $195 million of debt due in 2011.
Prior to its restructuring, InSight had about $500 million in debt.
InSight paid about $12 million in interest expenses in the latest quarter, a figure that should go down as a result of the restructuring.
The company, which had been private for more than five years, now trades on the low-profile Bulletin Board exchange after its restructuring.
Beckman Lands Contract
Beckman Coulter Inc., the Fullerton maker of medical testing gear and supplies, signed a $10 million contract with a Midwestern laboratory operator.
Beckman’s set to provide blood analyzers and supplies to Alverno Clinical Laboratories LLC of Indiana. Alverno is a venture of the Sisters of St. Francis Health Services Inc. and Provena Health, two Catholic hospital operators that combined lab services in 2005.
St. Francis and Provena run 18 hospitals and four labs in Illinois and Indiana.
Beckman’s blood analyzers are used by labs running tests for doctors and hospitals.
The company has yearly sales of $2.75 billion and a recent market value of $4.6 billion.
Beckman’s shares are up about 20% this year, driven by its own growth and speculation about a possible buyout. Siemens AG’s July buy of Beckman rival Dade Behring Holdings Inc. sparked talk about an acquisition of Beckman, which is the only major stand-alone maker of medical testing equipment left.
Late last month, Rick Wise of Bear Stearns downgraded Beckman Coulter shares to “peer perform” from “outperform,” saying the stock reflects the company’s growing business and the possibility of a buyout.
“At this point, we remain convinced that management’s recent restructuring and transition initiatives, combined with a slew of meaningful product launches in the last two years, have positioned the company for sustained financial performance,” Wise said.
But Wise recently called a Beckman buyout unlikely. Chief Executive Scott Garrett has said the company can compete on its own.
Ista: $2M for Allergy Drug Hopeful
Ista Pharmaceuticals Inc., an Irvine eye drug maker, has paid $2 million for U.S. rights to an allergy drug.
Ista bought the rights for bepotastine from Tanabe Seiyaku Co. of Japan.
The deal calls for Ista to give Tanabe additional payments after reaching milestones in developing bepotastine to treat nasal allergies. Ista acquired rights for a version of bepotastine to treat eye allergies last year.
Ista said it decided to make the deal after clinical studies of the eye formulation suggested it could improve nasal allergy symptoms.
The drug maker expects to start testing nasal bepotastine late next year or early 2009.
Getting the nasal formulation allows Ista “the opportunity to target the $3 (billion-plus) nasal allergy market beyond its ophthalmic specialty,” said Megan Murphy, an analyst with Lazard Capital Markets, in a note after Ista said it bought the rights to nasal bepotastine.
The cost to develop the nasal formula “is estimated at $30 (million), likely warranting a partner,” Murphy said.
Oregon Fines PacifiCare Unit
PacifiCare of Oregon Inc., a unit of Cypress-based PacifiCare of California, has agreed to pay a $34,000 penalty in Oregon for denying more than 200 insurance claims without justification.
The Oregon Department of Consumer and Business Services’ Insurance Division looked into PacifiCare’s claims payment methods based on an unidentified man’s complaint against the insurer for denying coverage for treating hypogonadism, a condition in which the body doesn’t produce enough male hormone testosterone.
PacifiCare of Oregon has hired staff to evaluate incomplete claims and automated systems to speed up and improve the accuracy of claims processing and appeals, Dan Miller, a spokesman for parent UnitedHealthcare Group Inc., told the Oregonian newspaper.
Bits and Pieces:
Irvine’s CenoMed BioSciences LLC, part of Los Angeles-based Abraxis BioScience Inc., said it signed a three-year research and development deal with the Army Medical Research Institute of Chemical Defense for an undisclosed amount. The deal will focus on CenoMed’s lead drug candidate, CM-2,501, for treating exposure to chemical warfare agents Amy Steinkellner, vice president, clinical services for Medco Health Solutions Inc.’s Systemed, is set to discuss “Prescription Drug Management: Upcoming Trends and Forecasts” at the Thursday breakfast meeting of the Orange County Employee Benefit Council. The morning meeting is at the Hilton Orange County, 3050 Bristol St., in Costa Mesa. Information: www.ocebc.org.
