Shares of Ista Pharmaceuticals Inc. fell on Thursday before the company could announce its second quarter results. The Irvine Orange County, California -based ophthalmic pharmaceutical company’s shares were down 35 percent at the close of Thursday’s trading on a market value of about $45 million. Ista’s shares have depressed since April due to disappointing drug results.

The same day the company reported its financial results for the second quarter of the year 2008, where it narrowed its loss as compared to the same quarter last year. Ista’ posted a net revenue of $17.8 million for the quarter, a 31 percent increase over the same quarter of the year 2007. The net loss for the quarter was $8.5 million or $0.26 per share, as compared to a net loss of $8.7 million or $0.32 per share for the same period in the year 2007.

The company’s total sales increased by a 40 percent gain from Ximrom, the flagship drug for treating pain after cataract surgery. Its sales totaled $13.6 million in the respective quarter.

“Xibrom sales continued to grow strongly during the second quarter. As our commercial business grows, ISTA’s presence in the ophthalmic community is further enhanced and physicians are excited about the products we plan to bring to them in the coming years,” said Vicente Anido, Jr., President and Chief Executive Officer of ISTA Pharmaceuticals.

As of June 30, 2008, Ista had cash and short-term investments of $21.8 million and long-term investments in auction rate securities of $4.4 million.

Last month, the company was downgraded to “underperform” from “hold” by an analyst of Jefferies & Co. on concerns of the company’s liquidity. The analyst also cited that Ista has a $40 million pay off debt due in 2011, if bondholders exercise an option.

In response the company said that it had enough cash and equivalents to fund its operations and business for at least twelve months and it was in talks with its bondholders to renegotiate terms.

Ista expects its sales to be approximately $75 to $82 million in the year 2008.

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