UPDATE 2-BioScrip profit lags, withdraws outlook; CEO to quit

* Q3 EPS $0.04 vs est $0.09

* Q3 rev $441.2 mln vs est $434.7

* CEO to quit on Dec. 31, to take non-exec chairman’s role

* Promotes COO as new CEO effective Jan 1, 2011

* Shares sink 28 pct to year low
(Recasts, adds details, analyst comments, stock movement)

By Krishnkali Sengupta

BANGALORE, Nov 2 (BestGrowthStock) – BioScrip Inc (BIOS.O: ) withdrew
its full-year outlook after a disappointing quarterly show, as
it was reviewing a “strategic assessment” of its business lines
that could lead to shutting down of its unprofitable
operations.

The specialty pharmaceutical firm also ended its Chief
Executive Richard Friedman’s contract on mutual terms five
months ahead its expiry and will pay $1.7 million in severance,
but he will stay with BioScrip as non-executive chairman.

The company promoted its Chief Operating Officer Richard
Smith as its new CEO effective Jan. 1.

BioScrip shares crashed 28 percent to a year low of $4.07
and were one of the top percentage losers on Tuesday on Nasdaq.

The management change does not come as a surprise in view
of BioScrip’s inability to meet its outlook in less than four
months after it was issued. The company has been reporting
inconsistent results over the last few years.

The CEO change should be viewed positively by investors,
but it does not offset the company’s poor results, said Think
Equity analyst Glenn Garmont.

“I consistently have viewed this company as an attractive
acquisition target given their assets. However, they will have
to prove it in the next couple of quarters to attract buyers,”
Garmont told Reuters.

Garmont said the company could shed its unprofitable
business like its Pharmacy benefit management.

PROFIT DISAPPOINTS

BioScrip reported a lower-than-expected quarterly profit
for the second consecutive quarter, hurt by a manufacturer
recall requiring it to fill prescriptions with a higher-cost
product, elimination of an industry-wide brand product rebate
and changes in reimbursement from certain payors.

“We recognize that we did not meet our guidance,” COO Smith
said in a statement.

For the July-September quarter, net income fell to $2.0
million, or 4 cents a share, from $5.7 million, or 14 cents a
share, a year ago.

Revenue for rose 32 percent to $441.2 million.

Analysts on average had expected the company to earn 9
cents a share, on revenue of $434.7 million, according to
Thomson Reuters I/B/E/S.

The company said revenue in its infusion and home health
segments fell short of expectations, while its pharmacy segment
saw lower-than-anticipated patient refill patterns.

Through its infusion and home health segments, BioScrip
provides dispensing and administrative infusion-based drugs
that require additional medical supervision.

The company now plans to provide 2011 outlook in January.

BioScrip shares, which have gained about 37 percent in
value since touching a year low in August on disappointing
outlook, were down $1.46 at $4.17 in midday trade.

More than 2 million shares changed hands by 1215 ET, about
6 times their 50-day moving average volume.
(Reporting by Krishnkali Sengupta; Editing by Gopakumar
Warrier)

UPDATE 2-BioScrip profit lags, withdraws outlook; CEO to quit