While the overall market seemed to be deciding this week whether to keep the rally going or take a break, several stocks in the world of health care left no doubt. Here are three health-care stocks that had some of the most humongous gains over the last five days.
Light through the clouds
While the past few months have been a bit gloomy for Clovis Oncology (NASDAQ: CLVS ) , the company saw a little light peak through the clouds this week. Clovis announced fourth-quarter results after the market closed on Thursday. Shares popped the following day, and ended up more than 16% for the week.
It really wasn't that the results were all that great. The company lost $21.1 million in the fourth quarter compared to a $14.9 million loss in the same quarter of the prior year. And, as in prior quarters, Clovis had no revenue.
I suspect that my fellow Fool Sean Williams hit the nail on the head with his read on the situation with Clovis. First, the company has plenty of cash on hand. Second, Clovis is putting the best spin possible on its refocused efforts to advance two mid-stage cancer drugs after its disappointing phase 3 results for pancreatic cancer drug CO-101 last year.
Good by comparison?
Orexigen Therapeutics (NASDAQ: OREX ) shares surged nearly 15% this week. This was yet another one of those cases where the company didn't have any major announcements, but the stock performed well, anyway. That leaves us having to speculate why Orexigen share shot up.
One plausible explanation is that the company actually benefited from the disappointing financial results announced this week by VIVUS (NASDAQ: VVUS ) . The rival drugmaker reported fourth-quarter revenue that was half of what analysts expected due to sluggish sales of its weight loss drug, Qsymia. As you might expect, VIVUS shares plunged.
Why would Orexigen shares jump on VIVUS' bad news? This is just a guess, but one of the big reasons for Qsymia's slow start has been that its distribution channel is limited to mail-order pharmacies. Orexigen is quick to point out that it already has a partnership in place with Takeda to market directly to physicians.
Also, despite the poor financial results, VIVUS indicated that more positive reimbursement decisions could be on the way for Qsymia. Having someone else clear the pathway with payers sounds like a good thing for Orexigen.
Shareholders of Optimer Pharmaceuticals (NASDAQ: OPTR ) had plenty of reasons to be optimistic this week. Shares climbed more than 11%.
The company beat estimates across the board. Fourth-quarter revenue came in at $19.5 million, well ahead of the $18.1 million expected by analysts. Those same analysts were anticipating a $0.38 per share loss during the quarter. However, Optimer surprised them by posting earnings of $0.02 per share.
That really wasn't the big news, though. Optimer announced that it had replaced outgoing CEO Pedro Lichtinger with current chairman Dr. Henry McKinnell. Even bigger news was that McKinnell's first message as CEO was that the company is "conducting a comprehensive review of strategic alternatives to maximize shareholder value." The market knows how to interpret that language, and responded positively in anticipation of a possible sale of the company.
When it comes to picking the best of the best for this week, I'm like the market -- indecisive. For the short-term, I guess if forced to make a pick, I'd go with Optimer. The possibility of being acquired can do wonders for stocks. All it will take is a few rumors of potentially interested buyers to drive shares up even more.
Over the longer run, I think Orexigen has a pretty good shot at success. Clovis has the tougher challenge, but still could be a winner if clinical trials go well. Alright, I have decided -- in a positive direction, I might add. Now, if the market will just do the same, we'll all be in good shape.
Who will win the obesity drug market?
While Orexigen still has a while before its drug will enter the market, the other two main players will do battle. Can VIVUS pick up its lagging sales and fend off the competition, or will Arena Pharmaceuticals take the lead in the obesity space? If you're in the dark, grab copies of The Motley Fool's premium research reports on VIVUS and Arena Pharmaceuticals to stay up to date. Senior biotech analyst Brian Orelli gives investors the must-know information, including an in-depth look at the obesity market and reasons to buy and sell both stocks. Click now for an exclusive look at Arena and VIVUS -- complete with a full year of free updates -- today.