OAKVILLE, Ont. – Concordia International stock closed at its lowest level in more than two years on Friday after the health-care company suspended its dividend and wrote down the value of two products because of unexpected competition from generic drugs.
The shares (TSX:CRX) traded as low as $15.50 in the first hour of trading at the Toronto Stock Exchange this morning — the first time since April 2014 that the stock has traded below $20 per share — before closing at $12.95, down $8.31 or 39 per cent from the previous close.
Concordia shares had already lost about 80 per cent of their value since rising above $100 per share a year ago, closing Thursday at $21.26, representing a market value of about $816 million prior to Friday’s plunge.
The latest plunge was sparked by a number of announcements by the company, based in Oakville, Ont.
Among other things, Concordia’s board suspended the quarterly dividend — worth 7.5 cents per share — to deploy the funds for business initiatives or debt repayment.
It also announced a US$570.4-million net loss from continuing operations, worth US$11.16 per share, primarily because of a US$567.1-million writedown of its Nilandron and Plaquenil product lines as a result of increased generic competition.
Concordia, which sells a variety of pharmaceuticals and medical devices, also lowered its 2016 guidance because of “unexpected competition on several products in our North America segment and current foreign currency exchange rates.”
Simultaneously, Concordia announced that its chief financial officer, Adrian de Saldanha, will be leaving the organization after a transition.
He’ll be replaced by Concordia executive vice president Edward Borkowski, previously a CFO with Amerigen Pharmaceuticals and Mylan — two other drug companies.
Concordia also said it’s providing additional disclosure about certain transactions in 2015 and the first quarter of 2016, as a result of an Ontario Securities Commission review of Concordia’s financial reporting.