Why Synageva BioPharma Shares Slumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biopharmaceutical company Synageva BioPharma (NASDAQ: GEVA  ) slumped as low as 11% today after its quarterly results and guidance disappointed Wall Street.

So what: The stock has soared over the past year on strong data from Synageva's lead lysosomal acid lipase deficiency drug sebelipase alfa, but a fourth-quarter loss of $15.1 million combined with downbeat guidance for 2013 is forcing Mr. Market to sober up a bit. While analysts remain largely optimistic about the drug's potential, the prospect of more operating losses -- coupled with a lack of meaningful news catalysts coming up -- gives short-term-oriented traders little reason to stick around.

Now what: For the full-year 2013, management now sees a loss of between $87 million and $97 million.

"[W]e entered 2013 with a strong cash balance which will be thoughtfully and strategically allocated to facilitate the achievement of our goals for 2013 and beyond," CEO Sanj Patel reassured investors.

So while Synageva remains just too speculative for average investors, today's pullback -- the stock is now off about 15% from its 52-week high -- might be an attractive opportunity for biotech-savvy Fools.

While you can certainly make huge gains in biotechs like Synageva, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Interested in more info Synageva? Add it to your watchlist.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2307736, ~/Articles/ArticleHandler.aspx, 11/27/2014 7:22:52 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement