With only a few weeks remaining in 2013, some stocks could be poised to go out with a bang -- while others go out with a thud. Count these three stocks in the latter category. Here are the past week's most horrendous health-care perfomers.
Selling the news?
You've heard it before: Buy the rumor; sell the news. This week appeared to be selling time for Geron (NASDAQ:GERN). The biotech had great news, but a sell-off drove shares down nearly 19%.
Data presented earlier in the week at the American Society of Hematology, or ASH, 2013 Analyst and Investor Conference pointed to tremendous potential for Geron's myelofibrosis drug imetelstat. We're talking about impressive clinical improvement, including 50% spleen size reduction in five out of 13 patients.
So why did Geron's shares tank? It wasn't that the results weren't good. They were. Imetelstat seems to be on a path to challenge Incyte's (NASDAQ:INCY) Jakafi, the only drug currently on the market for treating myelofibrosis. And Incyte can't claim the potential disease-modifying benefit that Geron hopes to tout for imetelstat. Were investors simply heeding the old advice to sell the news? That's the most likely explanation for Geron's pullback.
It wouldn't be surprising if some Array BioPharma (NASDAQ:ARRY) shareholders' faces turned pale over the past few days. The stock fell 16% for the week after the company presented at ASH.
One of the presentations focused on multiple myeloma drug filanesib, formerly known as ARRY-520. The data showed solid results for the drug in combination with Amgen's (NASDAQ:AMGN) Kyprolis as well as with Takeda's Velcade. Array plans to move forward with a phase 3 study comparing filanesib and Kyprolis to Kyprolis taken alone.
Another presentation highlighted results from clinical studies of myelodysplastic syndromes, or MDS, drug ARRY‑614. These results were also generally positive.
Is Array in the same club as Geron? Could be. The stock had a nice run-up in the two weeks leading up to the ASH meeting. After the results, shares dropped back to near the levels before the run-up. Buy the rumor; Sell the news.
Pharmacyclics (NASDAQ:PCYC) also presented at ASH this week. And similar to Array BioPharma, its shares fell nearly 16%. Same old story? Not necessarily.
Part of Pharmacyclics pullback this week appears to have stemmed from news about a departure of one of the company's executives. J.P. Morgan commented that shares fell because of concerns that a manager in Pharmacyclics' sales organization left the company. However, the investment firm noted that the head of sales is remaining with the company and that the departure shouldn't be considered as significant.
It is true that Pharmacyclics' shares also fell somewhat after the ASH presentations. However, the data presented shouldn't temper enthusiasm about the prospects for the company's Bruton's tyrosine kinase inhibitor Imbruvica. The drug is already approved as a second-line treatment for mantle cell lymphoma and is part of clinical studies targeting treatment of several other indications, including chronic lymphocytic leukemia and multiple myeloma.
From thuds to bangs
Which of this week's horrendous stocks could go from producing thuds to making big bangs in the near term? I'll go with an "all of the above" answer.
A down week for the markets overall, combined with a letdown from ASH, helped to take the wind out of the sails of all of these stocks. All of them, though, appear to have drugs with great potential. Any of these companies could experience setbacks from clinical results or regulatory hurdles. However, I suspect that a year from now, Geron, Array, and Pharmacyclics will be sporting higher valuations.
Fool contributor Keith Speights and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.