UPDATE 2-BioScrip Q2 lags, sees weak FY10 rev; shrs hit yr-low

Fri Jul 30, 2010 1:43pm EDT

* Q2 adj. EPS 7 cents vs est. 9 cents

* Q2 rev $412.0 mln vs est. $426.7 mln

* Sees FY 2010 rev at lower end of prior view

* Shares fall 30 pct to yr-low (Adds details, analyst comments, updates stock movement)

By Krishnkali Sengupta

BANGALORE, July 30 (Reuters) - Specialty pharmaceutical company BioScrip Inc (BIOS.O) posted lower-than-expected quarterly results and said it expects 2010 revenue at the lower end of its prior view, as it plans to focus on therapies that are more profitable but have lower per-patient revenue.

Shares of the company sank as much as 30 percent to their 52-week low of $4.40, but recovered some losses to trade down 26 percent at $4.64 Friday afternoon on Nasdaq.

"Honestly I think its an over-reaction ... may be we were too optimistic for the second quarter," Dougherty & Co LLC analyst Brooks O'Neil said.

He added investors could be disappointed as the company had been struggling a little for the past couple of quarters with completion of Critical Homecare Solutions acquisition in January.

"And a significant reason could be, as it happens to be the last day of the month, a lot of hedge funds get evaluated on their performance, so they do not want to own stock at the end of the day," O'Neil added.

BioScrip said it was targeting those therapies that can generate the greatest profitability per patient, such as the traditional infusion therapies.

Through its infusion and home health segment the company provides dispensing and administrative infusion-based drugs that require additional medical supervision. It also provides nursing services such as rehabilitation and occupational therapies.

For 2010, the company had earlier forecast revenue of $1.67 billion to $1.72 billion.

For the second quarter, the company posted a net income of $3.1 million, or 6 cents a share, compared with $4.4 million, or 11 cents a share, a year ago.

Excluding special items, the company earned 7 cents a share.

Revenue rose 25 percent to $412 million.

Analysts on an average were expecting earnings of 9 cents a share, on revenue of $426.7 million, according to Thomson Reuters I/B/E/S.

Revenue from the pharmacy services segment rose 4.5 percent, while revenue from infusion and home health services nearly tripled.

Critical Homecare Solutions contributed about $63.5 million to the infusion home health segment. (Reporting by NR Sethuraman and Krishnkali Sengupta in Bangalore; Editing by Unnikrishnan Nair)