Business News

March 24, 2008

Product sales increase during unprofitable year for CytogenFDA announces MQSA enforcement actions

Product sales increase during unprofitable year for Cytogen

Cytogen, a provider of diagnostic and therapeutic agents for oncology, reported a net loss of $25.7 million ($0.79 per diluted share) for the fiscal year ended Dec. 31, 2007, compared with a $15.1 million loss in 2006. Its 2006 performance was mitigated by a $12.9 million gain from the sale of its joint venture interest in PSMA Development Company.

In the fourth quarter, Princeton, NJ-based Cytogen lost $5.3 million compared with an $8.9 million loss in the same period of 2006.

Product revenues for 2007 were generated mainly from the sale of Quadramet (sarmarium Sm-153 lexidronam injection), an agent that relieves pain from bone metastases, Prostascint (capromab pendentide), a probe for prostate cancer staging, and Caphosol, an advanced electrolyte solution for treating dry mouth. In combination, the agents generated revenues of $20.2 million in 2007, up from $17.3 million in 2006. Quarterly sales of the three agents totaled $2.1 million, $2.4 million, and $632,000, respectively.

The company on March 11announced plans to merge with EUSA Pharma. Cytogen's year-end cash and cash equivalents stood at $8.9 million as of Dec. 31 compared with $32.5 million at the close of 2006. The firm expects to have sufficient capital resources to carry it through the second quarter if the merger with EUSA goes through.

FDA announces MQSA enforcement actions

The FDA has announced a handful of enforcement actions in 2007 for the 8859 breast imaging services that participate in its mandatory Mammography Quality Standards Act accreditation program.

One criminal prosecution and conviction relating to mammography in 2007 arose. The FDA reported that Percival Norman Fenton of Wintergreen, VA, pleaded guilty and was sentenced to 54 months imprisonment, three years probation, and a $400,000 fine for mail fraud and lying to a grand jury. The court found that Fenton had lied about his academic credentials and had fraudulently worked as a medical physicist for hospitals in Kentucky, North Carolina, Tennessee, Virginia, and West Virginia.

Accreditation was revoked in August 2007 for three facilities owned by Bay Imaging in Brooklyn. They have since ceased their breast imaging operations, according to the FDA.

Medical and Molecular Imaging in Hackensack, NJ, lost its accreditation after the FDA confirmed problems with image quality after a complaint from an interpreting physician.

Baltimore Imaging Center applied to have its accreditation reinstated after a clinical image reviewer found serious quality problems.

Evidence of quality control testing fraud was identified at a Belmond, IA, medical center. It retained its accreditation credentials after follow-up inspection. The technologist in question no longer works at the facility.

A state inspection of Heart of Lancaster Regional Medical Center in Lititz, PA, found the facility performed mammography after its equipment failed a phantom image test for four consecutive months. The facility was fined and required to reread mammograms performed when the equipment's performance was in question.

Quality assurance problems at Diagnostic Image Plus in Mesquite, TX, led to a state fine and a ban against performing mammography for at least five years.