3 Horrendous Health-Care Stocks This Week

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

August might be hot for most of the country, but the first full week of the month wasn't so hot for some stocks. Here are some of the most horrendous performers across all of health care for the past week.

Poor Provenge
(NASDAQOTH: DNDNQ  ) tried to spin its second-quarter financial results as positively as it could. The market wasn't buying the spin, though. Shares for the pharmaceutical company plunged 26% for the week.

The problems stem from prostate cancer drug Provenge. While second-quarter sales picked up compared with the previous quarter, they were still down 8.3% year over year. As a result, Dendreon's net loss of $0.45 per share missed the average analysts' estimate of a $0.42-per-share loss.

Management pointed to as many positives as they could, including a positive opinion from Europe's Committee for Medicinal Products for Human Use and highest-ever sales in urology. Those positives weren't enough to overcome the stark financial reality that sales for Provenge will still fall in 2013 from 2012 levels.

A miss, and two on the way
Robert Mulroy, CEO of Merrimack Pharmaceuticals (NASDAQ: MACK  ) , said his company was "pleased with a strong quarter of progress" in the press release announcing second-quarter results. Investors weren't as pleased. Shares fell 9% this week, with most of the drop occurring after the second-quarter update was announced.

Merrimack reported a net loss for the quarter of $0.31 per share. Analysts expected a loss of $0.28 per share. That miss only partially explained investors' disappointment. Merrimack also reported some negative news with one of its clinical studies.

The company, along with development partner Sanofi (NYSE: SNY  ) , has several studies under way for cancer drug MM-121. Merrimack said that interim review of two of those studies, one in ovarian cancer and another in wild type non-small-cell lung cancer, suggested that primary endpoints would not be met. These setbacks probably affected the stock more than the earnings miss did.

Multiple factors
(NASDAQ: NVAX  ) shares fell 12% for the week. Like Merrimack, the company failed to meet analysts' expectations for earnings. Also like Merrimack, there's a little more to the story than just financial results.

In the case of Novavax, part of the problem stems from questions about contractual revenue coming from its partner, BARDA. Another issue is that the company seems likely to conduct additional phase 1 trials for avian flu vaccine Matrix-M, which it picked up with the acquisition of Isconova.

Of course, reporting a 51% year-over-year decrease in revenue during the second quarter doesn't look great, either. Getting the BARDA revenue flowing in will help out on that front. Positive clinical results from vaccines in the pipeline could also help shares rebound.

Toughest road ahead
Because they're still clinical-stage companies, Merrimack and Novavax can expect downturns like they experienced this week. However, they can just as easily surge on good clinical news.

Dendreon seems to have the more difficult path. Even though the company has a product that is generating revenue, those sales continue to disappoint. The market is much more forgiving of early stage biotechs without a product on the market than it is for a company that consistently disappoints after its product launches.

While Dendreon still has some hope that sales for Provenge can grow, it's going to be a tough road ahead. I think it has the highest chance for a horrendous week to turn into a horrendous year.

You can have great weeks and horrendous weeks in the stock market. Despite these ups and downs, 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.

Read/Post Comments (0) | Recommend This Article (3)

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.

Compare Brokers

Fool Disclosure

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: 2589588, ~/Articles/ArticleHandler.aspx, 9/26/2016 12:17:30 PM

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...

Today's Market

updated Moments ago Sponsored by:
DOW 18,120.41 -141.04 -0.77%
S&P 500 2,150.34 -14.35 -0.66%
NASD 5,264.98 -40.77 -0.77%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
DNDNQ $0.00 Down +0.00 +0.00%
Dendreon Corp CAPS Rating: *
MACK $6.12 Up +0.14 +2.36%
Merrimack Pharmace… CAPS Rating: ***
NVAX $2.32 Up +0.06 +2.65%
Novavax CAPS Rating: **
SNY $38.04 Down -0.31 -0.81%
Sanofi CAPS Rating: *****