EAST WINDSOR: Township business may lose with NASDAQ

By Matt Chiappardi, Staff Writer
   EAST WINDSOR — Township-based pharmaceutical development company NexMed Inc. is in danger of having its stock being removed from the Nasdaq stock exchange.
   NexMed’s share price has dropped more than 90 percent over the past year, and took a 71 percent hit in August when its developmental partner — Switzerland-based Novartis AG — decided not to submit a new drug application to the federal Food and Drug Administration for an experimental nail fungus treatment.
   ”It wasn’t unexpected. Our stock price took a precipitous drop,” said Mark Westgate, the company’s chief financial officer.
   In order for companies to trade on Nasdaq, their prices are required to be $1 per share or higher. Once a company’s share price drops below the minimum for more than 30 days, the exchange gives the company 180 days to get it back up.
   The stock has not closed above $1 since Aug. 26. It closed at 15 cents a share Wednesday.
   Nasdaq originally gave NexMed until April 7 to have its share price stay above $1 for a minimum of 10 days. However, what was a financial crisis for many, has turned out to be a ray of hope for the company.
   As one of the many temporary trading rule changes to help mitigate the wild loses global markets were suffering this past month, Nasdaq suspended its minimum share price rules until January. That pushes NexMed’s deadline to July.
   ”We’re certainly going to try to get it up,” Mr. Westgate said. “We’re going to move forward and execute our business plan. You never know what the market will do from now until July.”
   That plan includes moving ahead with attempts to have its topical nail fungus treatment approved in Europe, a move which Mr. Westgate said he hopes would generate “significant revenues.”
   He added that the issue with the cream was not one of safety but rather “efficacy.”
   Nonetheless, the company applied to patent the treatment last week, and earned a $3.5 million milestone payment from Novartis for doing so, Mr. Westgate said.
   Another part of the company’s plan is an experimental cream to treat erectile dysfunction that is still awaiting FDA approval. The company applied for approval more than a year ago, and the FDA required NexMed to resubmit its application in July 2008 because it didn’t have enough data to completely evaluate it, Mr. Westgate said.
   He said he hopes the cream will hit the market by the third quarter of 2009, helping raise NexMed’s revenues as well.
   Still, NexMed has never turned a profit since its inception 21 years ago, Mr. Westgate acknowledged. At the end of 2005, the company recorded a $15.7 million annual loss, however losses have been cut to $9.4 million by the end of 2007.
   Mr. Westgate said he anticipates the company actually making a profit in 2010 if the erectile dysfunction and toe fungus creams are eventually approved.
   But when asked about the possibility of the company not being able to survive into 2010 if it doesn’t become profitable, Mr. Westgate answered, “Sure that’s a possibility. For now, we’re just going to move forward with our products.”
   If NexMed’s stock were to be removed from Nasdaq, it would then be traded on the “over-the-counter markets,” a system that has no central exchange and is brokered though a series of middlemen called dealers.
   Mr. Westgate said the company plans to appeal if the company’s stock is indeed removed in July.
   NexMed is located on Twin Rivers Drive and employs 24 people.