Important note: Information in this article was accurate in 2003. The state of the art may have changed since the publication date.
San Francisco Chronicle - Thursday, August 14, 2003
Bernadette Tansey, Chronicle Staff Writer
Virologic said the federal prosecutor's office based in San Francisco has also taken no enforcement action after completing a probe of the same misconduct allegations, which related to Virologic's revenue projections for 2001 and 2002.
"It has always been clear to us that these allegations were without merit, and the company believes they were made by (a) former employee in an attempt to create a basis for an employment-related legal claim," Virologic Chief Executive Officer Bill Young said. "We are pleased to have had the agencies review the matter so we can put it behind us and continue our focus on improving the lives of people living with HIV and delivering on the goals we have set for growing our business and achieving profitability."
A spokesman for the SEC declined to comment. Matt Jacobs, a spokesman for the U.S. attorney's office in San Francisco, said he could not say whether an inquiry took place or has concluded. A Virologic spokesman said the company faces no shareholder suits or other court actions.
Virologic develops genetic tests to identify viral strains that are resistant to drugs, helping doctors decide which treatment is best for each infected patient. Virologic lowered its 2002 revenue forecast last summer, citing a slowdown in patient testing programs and drug company studies. Its shares dropped from $2.50 to $1 in August 2002.
In January, an analyst reported that an anonymous critic had complained to the SEC and posted online accusations that Virologic officials knew they had been giving misleading guidance about the company's expected performance. The analyst, Matt Geller of CIBC World Markets, downgraded Virologic on Jan. 15, saying federal inquiries into the charges would create investor uncertainty. CIBC makes a market in Virologic shares.
After Virologic announced Wednesday that the federal probes had triggered no charges, company shares rose 15 cents, or 13.04 percent, to close at $1.30.
Virologic got good news from another government agency this month. The National Institute of Allergy and Infectious Diseases, a division of the National Institutes of Health, awarded Virologic three research grants worth more than $3 million. The grants will help Virologic improve techniques to identify drug-resistant strains of HIV and evaluate the effectiveness of new antiviral therapies.
Virologic also announced this month that its second quarter revenue was 19 percent higher than the same period last year, rising from $6.7 million to $8 million. The company also narrowed its second quarter loss from $5.5 million (22 cents per share) in 2002 to $2.2 million (7 cents) this year.
E-mail Bernadette Tansey at btansey@sfchronicle.com.
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