Two top executives of the health website www.drkoop.com have resigned as the company's financial health has continued to decline. The share price, which was once $35 (£23), sank to about $1 earlier this month.
The chief operating officer, Dennis Upah, and the chief financial officer, Susan Georgen-Saad, both resigned but will remain as consultants until successors are named. Two members of the board of directors of the company have also resigned.
Last week, however, Millen-niumHealth Communications, an internet health news company, said that it had offered to merge with the ailing company, and the share price recovered slightly.
The former US surgeon general, C Everett Koop, founded the website in June 1999 to provide healthcare information and to promote commercial deals offered by manufacturers (BMJ 1999;318:1644). The rise in the stock price at the initial public offering made Dr Koop an instant millionaire.
The website came under fire, however, for mixing information with advertising (BMJ 1999;319:727). Dr Koop himself was criticised for possible conflict of interest in his testimony before a congressional committee (BMJ 1999;319:1217).
The company, one of more than 17000 health websites, expects a second quarter loss of $1.15-1.18 a share. First Call/Thomson Financial, market analysts, had predicted a loss of 30 cents a share.
Shares of drkoop.com are now trading at about $1 a share on the Nasdaq stock market. Drkoop.com raised $88.5m when it first sold stock to the public but had only $35.7m left at the end of 1999.
The company lost $56.1m last year after taking in just $9.4m in revenue. The company blamed its loss on bad publicity after what it called a “string of struggles.” Its negative cash flow (8 April, p 958) raised doubts about its survival.
The company predicts that the revenue for the second quarter, ending 30 June, will be between $2.5m and $3m.