Shares of Irvine eye drug maker Ista Pharmaceuticals Inc. fell nearly 20% early last week after an analyst downgraded the company on concerns about it running out of money.
Analyst David Windley of Jefferies & Co. downgraded Ista to “underperform” from “hold.”
The company has a market value of about $75 million, with its shares rebounding later in the week.
The analyst cited concerns about Ista having to pay off debt due in 2011 early if bondholders exercise an option. That could lead to Ista running out of cash next year, according to Windley.
Ista said in its first-quarter report that its cash and equivalents, which totaled $29.6 million as of March 31, “will fund the operations and business for at least 12 months,” according to Chief Financial Officer Lauren Silvernail.
Ista is going to provide an update on its cash and drug development pipeline next week when it releases its second-quarter results, Silvernail said. She also said Ista is in talks with bondholders to renegotiate terms.
,Vita Reed
