5 Stocks That Finished in the Red on Thursday

by: Alex Shadunsky

There were numerous stocks on the downside on Thursday with the broader market being in the red. Here are five of the notable ones.

MEDTOX Scientific (MTOX) fell over 12% after its earnings missed analyst estimates. The company reported EPS of $0.16 vs. $0.18 consensus while revenues rose 10.9% y/y to $27.9 million. For the three-month period ended June 30, gross margins improved in both the Laboratory Services and Diagnostic Product segments, with overall gross margin increasing 220 basis points to 43.3% compared to 41.1% in the second quarter of 2010. Operating expenses for the quarter were relatively flat at 35.5% of revenue, compared to 35.0% of revenue in the prior-year period, and were down from 35.8% of revenue in the first quarter of 2011.

Prana Biotechnology (PRAN) fell 6% after it announced a common stock offering. The company said that it filed a prospectus supplement to sell up to an aggregate 50,000,000 ordinary shares, represented by 5,000,000 American Depositary Shares through an "at-the-market" (ATM) offering. Prana currently intends to use the proceeds from any sales related to the ATM offering primarily for ongoing and future research programs into the development of its proprietary compounds, including its lead compound PBT2, and for working capital purposes. Prana intends to commence a Phase II imaging trial for PBT2 in Alzheimer's disease patients and a Phase II trial for PBT2 in Huntington's disease patients later this year.

Vista Gold (VGZ) closed 8% lower after its investment, Midas Gold Corp., had an IPO that disappointed investors. Vista Gold announced that Midas Gold successfully completed an IPO, issuing 12,307,700 common shares of Midas for gross proceeds of Cdn$40,000,025 million. Midas shares began trading on the Toronto Stock Exchange on Thursday under the symbol "MAX." Vista owns 31,802,615 Midas shares, which following the completion of Midas' IPO represents 30.7 % of the issued and outstanding shares of Midas. Based on the IPO price of Cdn$3.25 per share, Vista's investment in Midas is expected to have a value of Cdn$103,358,499 and based on the number of issued common shares of Vista, this is equivalent to Cdn$1.45 per Vista share.

Transcept (TSPT) fell another 4%, continuing its descent since yesterday after the company announced that it expects to receive a Complete Response Letter from the FDA regarding the resubmitted New Drug Application (NDA) for Intermezzo (zolpidem tartrate sublingual tablet) on or before July 14. Late last night, the company confirmed that it received the Complete Response Letter. The FDA confirmed that Transcept adequately demonstrated that Intermezzo is efficacious for use as needed in the treatment of insomnia when a middle-of-the-night awakening is followed by difficulty returning to sleep. However, the FDA stated that it cannot conclude that Intermezzo can be used safely based on the information in the Intermezzo NDA.

As a possible path forward, the FDA suggested that Transcept further investigate whether body weight and demographic factors contribute to differentially elevated blood levels the morning after dosing Intermezzo, develop strategies to decrease next-morning zolpidem levels, and, after mitigation strategies are implemented, demonstrate that next-morning blood levels do not present an unacceptable risk of next-day impairment, which may include the conduct of an additional driving study.

Capital One Financial (COF) fell 4% after it priced a 40 million share offering of common stock at $50 a share.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.