April's Unhealthiest Stocks

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Leading health-care stocks have had a good start to the year, but all's not healthy in the world of medicine. Several notable stocks from the sector took a dive in April, plunging more than 10% and giving investors headaches. What are the biggest names you need to know -- and should you be worried about these disappointments? Let's look at three of April's unhealthiest health care stocks and why they fell.

Double-digit dives from devices to drugs
Earnings season hasn't been kind to many companies in the health-care sector, but few companies took losses as bad as Edwards Lifesciences (NYSE: EW  ) . The company's shares fell sharply after it missed analyst projections and lowered full-year expectations. The stock plunged as much as 22% during the trading day alone, and for the full month, shares fell a disheartening 22.4%.

If that wasn't bad enough, Edwards projected disappointing future sales for its Sapien heart valve, which was one of the few bright spots this past quarter. The entire medical-device industry is struggling with cardiovascular products as a saturated market and pressures from Europe erode revenue at top companies. Edwards is hardly alone in this battle against a tough market, but don't expect relief to come quickly for this embattled device maker.

Sarepta Therapeutics' (NASDAQ: SRPT  ) losses in April didn't quite match Edwards' plunge, but an 18.8% dive was anything but a celebratory occasion for investors. The FDA asked for more information on the company's Duchenne muscular dystrophy drug, eteplirsen, before ruling on Sarepta's bid for the drug's accelerated approval. While the FDA request put the kibosh on optimism that eteplirsen could fly through the regulatory process, there are silver linings to this ruling. As fellow analyst Keith Speights reports, the FDA didn't outright reject the bid and is still considering a final ruling. Should the agency give Sarepta and eteplirsen the green light, those who held on to the stock through the worst of April's losses could be rewarded with big gains.

Neither of these stocks suffered as much as April's unhealthiest stock, Rigel Pharmaceuticals (NASDAQ: RIGL  ) . Rigel shares plunged by a dastardly 29.5% this past month, after its developmental arthritis drug, fostamatinib, which the company is developing alongside AstraZeneca (NYSE: AZN  ) , didn't show improvement in an X-ray evaluation of joint damage from the disease in a late-stage clinical trial. Fostamatinib did meet its other trial endpoint, but the failure was enough to send investors fleeing.

The news is bad enough for AstraZeneca, which is in desperate need of new blockbuster candidates, with its sales eviscerated by patent expirations. For Rigel, the blow is even worse: The company has no drugs on the market currently, and fostamatinib's miss is a huge disappointment to investors. Even if fostamatinib recovers, sales expectations have fallen sharply, with average analyst projections hovering around $170 million by 2016, according to data from Thomson Reuters. April hit Rigel hard, and the future looks bleak for this stock if fostamatinib can't make a full recovery.

These stocks might not show it, but investors can make huge profits in the health-care sector by finding growing companies with bright futures. However, 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.

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Related Tickers

9/30/2016 4:06 PM
AZN $32.86 Down -0.19 -0.57%
AstraZeneca CAPS Rating: ****
EW $120.56 Up +1.30 +1.09%
Edwards Lifescienc… CAPS Rating: ****
RIGL $3.67 Up +0.10 +2.80%
Rigel Pharmaceutic… CAPS Rating: ***
SRPT $61.41 Up +0.43 +0.71%
Sarepta Therapeuti… CAPS Rating: **