3 Horrendous Health-Care Stocks This Week

In the topsy-turvy world of health care, some stocks get rocked the most. Here is a look at three of the health-care stocks with the most horrendous performance for the week.

Super news?
Supernus Pharmaceuticals  (Nasdaq: SUPN  )  actually received good news this week, but you wouldn't know it from the way the stock performed. Shares dropped over 23% during the week.

The good news stemmed from FDA approval of Oxtellar XR for use in the treatment of epilepsy. This marked the second FDA nod for Supernus after it went public in May this year. The company received tentative approval for another epilepsy drug, Trokendi XR, in June.

Why the large decline on good news? Profit-taking could have driven shares down to some degree. The stock is very thinly traded, though, so any number of other factors could have been at work.

Loss leader
A week that started off with a slow downward path ended with a steep drop for Immunogen (Nasdaq: IMGN  ) . Shares fell 21% on the week. Investors seem to have been expecting bad news with the company's quarterly results. And bad news is what they got. 

The company reported its fiscal first quarter results on Friday. Losses topped $25 million. That's 29% worse than the same quarter last year. While Immunogen reported $1.6 million more in revenue compared to last year, operating expenses grew at a faster pace, rising $7.3 million during the quarter versus 2011. Research and development costs surged nearly 40%.

Immunogen looks to approval of its cancer drug T-DM1, which is being developed in partnership with Roche, as the catalyst to improve the company's fortunes. Roche has a study in progress with T-DM1 for second-line treatment of metastatic HER2+ gastric cancer. The company expects to file for marketing approval in 2015.

Fat chance
VIVUS (Nasdaq: VVUS  ) rounds out our list of horrendous performers for the week. Shares fell nearly 15%.

The company received notification on Oct. 18 that the European Medicines Agency's Committee for Medicinal Products for Human Use rejected marketing approval for obesity drug Qsymia. The stock has steadily declined since the announcement.

You might think that this bad news for VIVUS would benefit rivals Arena Pharmaceuticals (Nasdaq: ARNA  ) and Orexigen Therapeutics (Nasdaq: OREX  ) . That didn't happen this week, though.

Arena fell around 8% during the week. Orexigen dropped even more -- around 10%. Orexigen could be positioned to do well, though. Fool analyst David Williamson thinks that Orexigen could present a major threat to both other competitors down the road.

Best of the worst
My pick as the best of the worst for this week is Immunogen. Supernus doesn't trade broadly enough. Things don't look great for VIVUS, with the European decision and two significant  competitors. 

Immunogen, though, could see brighter days ahead. The company has plenty of cash to take it well into the future. It has solid partnerships in place, and several promising drugs in the pipeline. You could definitely do worse than going with Immunogen.

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Keith Speights has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend ImmunoGen. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 28, 2012, at 11:55 AM, insidetrack22 wrote:

    The statement "The company expects to file for marketing approval in 2015." for Immunogen is not accurate.

    Please see transcript from IMGN CEO.."marketing applications have been submitted in U.S. and in Europe in August and Roche has indicated the U.S. approval is expected in late 2012, or early 2013, and with European approval later in 2013. Approval for this use could open T-DM1 to all of the HER2+ metastatic breast cancer patients previously treated with Herceptin."

    2015 filing is for first line treatment.

  • Report this Comment On November 01, 2012, at 4:01 PM, TMFFishBiz wrote:

    Your comment is correct. IMGN CEO did make those statements in the earnings call.

    However, in the company's press release (http://investor.immunogen.com/releasedetail.cfm?ReleaseID=71..., IMGN stated: "Roche has initiated a trial assessing T-DM1 for second-line treatment of this disease and expects to apply for marketing approval for this use in 2015."

    The press release was my source for the statement in the article. I think that your assessment is probably correct, though, and the company maybe just made a mistake in its press release.

    Thanks for reading and taking the time to comment!

    Best,

    Keith

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