A lot of people have given up on Xytronyx--with good reason. The stock has been one of the big losers of the past two years. After hitting a high of 26 in late 1991, it headed downhill, to a low of 6 by early 1993. Recently, however, some aggressive players have been snapping up shares, driving the stock up to 10.
It's not just bottom-fishing. One New York money manager says Xytronyx, which has produced a test kit for detection of periodontal disease, will turn a profit in the last quarter of the year, ending Mar. 31, 1994. The year will still close with a loss, but he sees net of $1 a share in 1995.
Those earnings will come even before the Food & Drug Administration approves the product for the U.S. market, says Aaron Lehmann, president of Fulton Group, a research boutique in Greenwich, Conn. Part of his optimism is based on an exclusive agreement Xytronyx signed in May with Japan's Sumitomo Bank to find a partner to market the periodontal kit in that country.
The pact is part of Xytronyx' new strategy to aggressively market the kit outside the U.S. Colgate-Palmolive has worldwide rights to distribute it outside of China and Japan. Colgate recently ordered 50,000 kits to sell primarily in Britain and Australia. Xytronyx also has signed a deal with Asia Link, to seek regulatory approval and sell the kits in China, where periodontal disease is widespread.
Lehmann is optimistic about Xytronyx' other products, too, including an ink called Kephra he says can be used on natural or synthetic fiber or be incorporated into plastics or metals. Its special feature is an ability to change colors when hit by ultraviolet light.