Boston and St. Louis are battling in the World Series, while all the other Major League Baseball teams sit at home and watch. That's also what happens in the stock market. Some stocks must look on as others succeed. Here are three of the biggest strike-outs in health-care over the last week.
Revision collision
Health-care programs provider Healthways (TVTY) provided a dismal earnings outlook for the rest of the year. Shares promptly plunged, with the stock losing 30% for the week.
Healthways reported its third-quarter results after the markets closed on Thursday. The company announced that earnings dropped 64% year over year as fewer people participated in its health programs than expected. Analysts expected Healthways to achieve earnings of $0.12 per share, but the company's actual number came in at only $0.05 per share.
Because of the sluggish sales, Healthways lowered its full-year guidance for both revenue and earnings. The company now expects 2013 revenue of between $665 million and $675 million, down considerably from the prior guidance range of $710 million to $750 million. Healthways also now expects a net loss for the full year of $0.04 to $0.10 per share -- a big disappointment compared with the previous projection of at least $0.18 per share profit.
Push-back pullback
A submission for regulatory approval of hypogonadism treatment Androxal was expected for mid-2014. Not anymore. Repros Therapeutics (NASDAQ: RPRX) announced that it was delaying filing a New Drug Application, or NDA, for the drug until the third quarter -- and possibly fourth quarter -- of next year. Shares dropped almost 27% for the week because of the NDA submission push-back.
Repros said that the U.S. Food and Drug Administration wants more safety data on Androxal. As a result, the company must conduct two additional clinical trials. The delay caused at least one analyst to lower its rating for Repros. Ascendiant Capital Markets downgraded the stock from "strong buy" to "buy" following the FDA news.
There was a silver lining with this latest bad news, though. Repros said the comparative studies against competing testosterone treatments could lead the FDA to expedite the approval process if the results are positive. The company also thinks the studies and corresponding label claims could help improve its marketing efforts for Androxal.
Dilution dip
Ziopharm Oncology (TCRT -1.67%) wasn't far behind Healthways and Repros in terms of negative performance. Shares fell almost 27% for the week.
The reason for Ziopharm's drop wasn't as bad as our other two horrendous health-care stocks, though. The small biopharmaceutical company announced a secondary public offering on Tuesday. Ziopharm plans to sell $50 million worth of stock and allow underwriters of the offering to buy up to $7.5 million more.
Moves like this, of course, dilute the value of existing shares and inevitably lead to drop in a company's stock. However, the need to generate cash usually outweighs the negatives. Ziopharm needed additional cash in large part to fund development of its pipeline. The company has two mid-stage clinical studies in progress for cancer drug Ad-RTS-IL-12.
Extra inning
Most baseball fans enjoy exciting games that go into extra innings -- and a World Series that goes to the seventh game. In that spirit, we'll add a fourth stock this week to our normal list of three horrendous performers.
Pacific Biosciences of California (PACB -7.48%) earns the dubious distinction. Shares fell 20% this week after the genetic analysis technology company reported disappointing third-quarter results. Although revenue was up a hefty 164% year over year, Pacific Biosciences missed analysts' earnings estimates and recorded fewer installs of its DNA sequencing system.
Which of this week's trio of four stocks is most likely to get back in the game? I'll go with Repros. Assuming all goes well with the added studies of Androxal, the company should be able to recover over time from this week's drop.
That's not to say Healthways, Ziopharm, or Pacific Biosciences won't see more wins ahead. All three companies have the potential to score in the future. For now, though, my pick is Repros. And I'll also go with St. Louis in that other competition that's under way.
