Mr. Market cheered as the federal government raised its ability to take on more debt, but not everyone was so happy. It was nothing but gloom and doom for shareholders of these three horrendous health-care stocks.
Fish-tail spin
Nine votes from a U.S. Food and Drug Administration advisory committee was all it took to send shares of Amarin (AMRN -2.11%) into a tailspin. The stock plunged 60% this week after the FDA panel recommended against approval for fish-oil drug Vascepa in treating patients with high triglyceride levels.
While Amarin already sells Vascepa for treating patients with severely high triglycerides, the company had hoped to move forward with expanding to the much bigger market. The FDA doesn't have to abide by the advisory committee recommendation, but the likelihood is that the agency will do so.
Assuming the FDA doesn't approve Vascepa, Amarin will need to complete an outcomes study for the drug. That study is under way now, with an expected completion date of late 2017. Amarin recently completed a secondary stock offering, so the company has plenty of cash to move forward -- at least for the immediate future. Recovery from the "fish-tail spin" is possible, but it will take a while.
Epic fail
There's at least one other drugmaker that won't be putting the FDA on its Christmas card list. Ariad Pharmaceuticals (NASDAQ: ARIA) announced that it has halted the late-stage EPIC study of Iclusig after the FDA placed a clinical hold on the trial last week. Shares dropped 37% for the week after plunging nearly 80% last week.
Some patients in the phase 3 study who took Iclusig as a treatment for newly diagnosed chronic myeloid leukemia, or CML, developed blood clots. This led to the FDA's clinical hold, which ultimately resulted in Ariad's cancellation of the study. Iclusig is still on the market, however, as a second-line treatment for CML and for Philadelphia chromosome positive acute lymphoblastic leukemia, or Ph+ ALL.
It remains to be seen what impact the latest safety issues will have on prescriptions for Iclusig in the approved indications. Ariad is working with the FDA on changing the product's label to address the recent concerns. Physicians could possibly still view Iclusig as a viable alternative for CML patients who don't respond well to initial treatment.
Muddling along
Vivus (VVUS) didn't have a negative FDA decision or clinical study problems to worry about. However, a general malaise still lingers around the stock, with shares dropping nearly 13% this week.
Sluggish sales for obesity drug Qsymia continues to be the primary issue for Vivus. The company reported on Tuesday that around 108,000 prescriptions were filled for the drug in the third quarter, lower than expected. That led to a downgrade of the stock by Piper Jaffray.
It hasn't been all bad news for Vivus recently, though. The company announced that it had lined up a partner for impotence drug Stendra last week. Auxilium Pharmaceuticals (NASDAQ: AUXL) paid $30 million up front with potential for up to another $270 million in milestone payments. Auxilium plans to launch Stendra in the U.S. by the end of this year.
Comeback conditions
Can these three stocks make a comeback? Maybe -- but all face significant challenges.
For Amarin, the key is to obtain positive results from the Vascepa outcomes study. Ariad must successfully grow sales of Iclusig despite safety concerns. Vivus needs to see improvement from Qsymia and hope Auxilium does well with the Stendra launch. Of course, attracting the attention of a buyer wouldn't be a bad option for any of these companies, either.
