NexMed, Inc. (NASDAQ: NEXM) had a disappointing day on Tuesday, July 22, 2008, as the company announced that the Food and Drug Administration (FDA) had not approved their product for the topical treatment of erectile dysfunction. The FDA expressed concerns about carcinogenicity in transgenic mice that have been used for testing by NexMed. The company has not give up though, and stated that they will continue research and will address the major issues related to the "non-approval." This is probably the best option, as the study results cannot be applied in the development of NexMed's other products.
The company's shares plunged 6% after the market opened on Wednesday, July 23, 2008. However the volatility of this stock is so high that such a fluctuation can be considered normal.
As it is not the main product of the company, NexMed should not incur any large scale negative impacts because of the FDA's decision; although some negative financial impact may still be felt on the company's balance sheet. The company, which is still in the development stage, is mainly financing itself through equity sales. Their capital is limited and further research will require additional capital.
On a brighter note, NexMed's quarterly revenues from operations have increased nearly 232% over the last year's comparable period. The company is moving forward and has potential in their research. The question is whether or not the company will be able to offer something extraordinary before their competitors do so.
User comments
Follow the discusion about Nexmed, Inc in the forum