Virtus Health had $121.5 million wiped off its market value as a profit warning sent shares in Australia's largest IVF provider to a record low.
Virtus in February forecast low-to-mid teens growth in its underlying net profit for 2014/15, but now expects that to be in the mid-single digit range.
The IVF provider says it is facing bigger-than-expected non-recurring items of $2.3 million because it hadn't harvested and implanted as many fertilised eggs as expected for prospective parents.
Shares in Virtus plunged nearly 20 per cent, or $1.52, to close at a fresh low of $6.11.
The fall wiped out all the gains made by the company's shares since they listed on the stock market in June 2013, when they ended their first day of trading at $6.20.
Analysts say Virtus and its rivals are facing intense competition amid flat growth in the national IVF market.
Virtus said the IVF market in NSW had grown by six per cent in the three months to the end of April, but it hadn't carried out as many implants because patients were turning to rivals who offered bulk-billed services.
The company, whose clinics include IVF Australia, also lost market share in Victoria and Queensland.
Market growth went backwards in Queensland, falling four per cent, while it was up just one per cent in Victoria.
Meanwhile, Virtus's new Singapore clinic was off to a slower-than-expected start and faces a $1 million loss this year.
When it reported its first half results in February, Virtus recorded a 0.4 per cent rise in IVF cycle numbers to 7,646 and increased its market share to 45.6 per cent.
But it faces stiff competition from a plethora of rivals, including Primary Health Care, which opened the first bulk-billed IVF clinic in Sydney in mid 2014.
While Virtus doesn't offer bulk-billing, its Fertility Centre has a low-cost service of around $2,000 for the first IVF cycle before any Medicare rebates are claimed.
Bell Potter healthcare analyst John Hester said Primary's bulk billing service had only had a small impact on the sector.
"There's no growth in the industry because it's serviced by numerous providers," he said.
"I don't think it's a reflection of (Virtus's) management. It's just the market conditions at the moment."
Mr Hester believed the downturn in Queensland's mining sector, which has involved big job cuts and people moving from regional areas, had also been hurting Virtus.
"Queensland has been a disaster for some time for Virtus and that's linked to mining expenditure," he said.
"The downsizing of the industry in regional areas has been the driver of today's downgrade."
Virtus made a $30.89 million net profit in 2013/14, slightly lower than the $31.4 million forecast in its prospectus.