Health Care Web Sites Post Sickly Results

Sickly news emerged yesterday in the latest financial-results announcements of two companies that operate health care-related Web sites.

Drug Emporium Inc. in Powell, Ohio, and drkoop.com Inc. in Austin, Texas, both said they suffered big losses, and both have hired investment bankers to find financing for their foundering Web operations. One possibility is that the two online businesses may be combined together in an effort to turn their situations around.

In a conference call yesterday, David Kriegel, Drug Emporium's CEO, said the retail drugstore chain is negotiating a merger between its DrugEmporium.com Web site and drkoop.com. However, Kriegel didn't provide any details on a possible timetable for completing a deal or on how such a merger would affect the participants.

For now, both companies are hurting. Drug Emporium posted a $19.8 million loss in its fourth fiscal quarter ended Feb. 26, with its bricks-and-mortar retail operations losing $8.9 million of that money while DrugEmporium.com lost $10.9 million.

The company said it has secured an additional $5 million in financing to support DrugEmporium.com's operations, but added that it has hired an investment banking firm to help evaluate its options for the online business.

In addition, it announced that Michael Leach has resigned as chief operating officer at DrugEmporium.com to join another online health care startup.

The news from online health information provider drkoop.com, which was co-founded by former U.S. Surgeon General C. Everett Koop, was just as bleak.

It announced a $24.8 million loss for the quarter ended March 31, on revenues of just $4.7 million. The results were consistent with a preliminary warning issued late last month.

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