CONTRACT LOSS HITS SYNCOR'S SHARES; STOCK DECLINES 4.5% ON NEWS.Byline: Deborah Adamson Daily News Staff Writer Syncor International Corp. lost 4.5 percent of its stock value Monday on news that it expects a revenue drop of up to $15 million after losing a contract to a smaller rival. Syncor closed at $24, down $1.125. Analyst L. Mitra Ramgopal of Schroder & Co. in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of said Syncor didn't go after the contract aggressively because it didn't want to slash prices to gain market share at the expense of profitability. Syncor, a provider of radioactive isotopes radioactive isotope or radioisotope, natural or artificially created isotope of a chemical element having an unstable nucleus that decays, emitting alpha, beta, or gamma rays until stability is reached. used in illuminating body organs for diagnosis, lost the Novation The substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement. A novation ordinarily arises when a new individual assumes an obligation to pay that was incurred by the original party contract to Nycomed/Amersham. The $15 million revenue loss is equivalent to 4 percent of Syncor's annual sales. Novation is the purchasing organization representing the hospital members of VHA VHA Veterans Health Administration VHA Variable Housing Allowance VHA Villages Homeowners Association VHA Voluntary Hospitals Association VHA Virtual Home Agent VHA Very High Altitude VHA Vapor Hazard Area VHA Vermont Holstein-Friesian Association Inc. and University Health Consortium. Syncor has $112 million in business from VHA as a group and from the individual members of VHA and University Health. Syncor moved quickly to assure investors that it expects to retain much of that business. Brad Nutter, Syncor's chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , said Syncor is confident of keeping the majority of the business because many of these hospitals use Syncor's management software system and Syncor is more convenient for hospitals to use on account of its much larger distribution system. Syncor has 118 pharmacy centers nationwide compared with 26 for Nycomed. Also, Syncor has the exclusive distribution rights to Cardiolite, a popular cardiac-imaging agent that represents 40 percent of its sales to VHA and UHC UHC UnitedHealthcare UHC United Health Care UHC University Hospitals of Cleveland UHC United Hitech Corporation UHC Udvar-Hazy Center (National Air and Space Museum) UHC University Health/System Consortium UHC Unburned Hydrocarbons . And in 1996, when Syncor lost a similar contract, it still managed to retain 80 percent of the business, Nutter said. |
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