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Cornerstone profit drops, shares fall

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Cornerstone Therapeutics, one of the Triangle's newest publicly traded companies, reported this morning that second-quarter profit fell 19 percent.

But revenue from its respiratory drugs rose 78 percent to $25 million. That was a bit less than one analyst had expected and Cornerstone's stock fell 18 percent in morning trading.

The Cary company was formed in October when Critical Therapeutics and Cornerstone BioPharma merged. Then in late July, Cornerstone sold a 51 percent stake to Chiesi, an Italian drug maker.

"It has been an extremely busy and successful several months on multiple fronts for Cornerstone," said CEO Craig A. Collard, in a prepared statement.

The weaker profit shouldn't discourage investors, said Matthew Kaplan, an analyst with Ladenburg Thalmann & Co. in New York who follows Cornerstone.

The company continues to buy new products and expand what its sales representatives can sell to physicians. For example, Cornerstone agreed in July to buy the antibiotic Factive to treat chronic bronchitis.

Cornerstone has about 125 workers, including an 85-person sales force.

"They're putting together the pieces of the puzzle to really be very successful," Kaplan said.

But the company hasn't been around long enough for Wall Street to establish a solid track record for its earnings, he said. And there is "some seasonality" to Cornerstone's revenue because its drugs are tied to colds and flu, and demand tends to increase in the fall and winter.

Kaplan rates the stock a "buy" and expects it to reach $12.

Cornerstone's stock fell $1.75 today to $8.04. The shares have tripled so far this year.

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About the blogger

Assistant Business Editor Alan M. Wolf joined the N&O in 1999 covering the business of health care. He became an editor in 2001, and helps oversee the paper's daily business coverage and Sunday Work&Money section. He lives in Clayton with his wife and two children. Reach him at 919-829-4572 or e-mail him.
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