Acorda Therapeutics, The Medicines Co. and Shire Plc Could Be Big Movers in Healthcare Today

Today's movers in healthcare and biotechnology.

Feb 13, 2014 at 9:34AM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good morning, fellow Foolish investors! It's time to check in on the top stories in the health care sector this morning.

Acorda beats earnings estimates
Earnings in the health care sector continue to impress as Acorda Therapeutics (NASDAQ:ACOR) beat analysts' estimates this morning. Specifically, Acorda reported a fourth quarter earnings per share of $0.32, beating estimates by $0.03. Revenues also increased by a healthy 13.6% year over year due to stronger than expected sales of the company's flagship drug Ampyra.

Looking ahead, Acorda expects sales of Ampyra to grow another 11-13% this year, but costs associated with the company's six ongoing clinical studies will also increase markedly. 

Should you put Acorda on your watch list? I have liked this stock for a long time, but Wall Street's view has clearly differed from mine. Despite steadily growing revenues for Ampyra since its launch and making progress on the clinical trial front, the stock has lagged well behind the health care sector over the last year. Moreover, short sellers still hold close to 9% of outstanding shares. That said, you have to think that growth will eventually win out, and Acorda will see better times in terms of share price appreciation. So, stay tuned!

More bad news for The Medicines Co. 
When biotechs get an experimental drug or therapy rejected, it's fairly normal for analysts to lower their estimates for the company's shares. And that's exactly what's happening to The Medicines Co. (NASDAQ:MDCO) today following a negative vote by a U.S. Food and Drug Administration, or FDA, Advisory Committee for the company's experimental drug cangrelor.

Specifically, cangrelor was up for review as an intravenous antiplatelet in patients undergoing percutaneous coronary intervention yesterday, where it received a 7-2 'no' vote. Although the FDA doesn't have to follow the committee's recommendation, it typically does. Final word from the FDA on the drug's fate is expected by April 30.

This morning Jefferies was among the first out of the gate to downgrade the stock, slicing its price target by 15% in the process. Shares are currently down over 10% in premarket trading. 

What's my take? Jefferies obviously believed a good chunk of the company's valuation moving forward was tied to cangrelor's commercial prospects, and by the looks of it, the market appears to agree with this assessment. So, you may want to wait until the smoke clears before trying to pick up shares on the cheap.

Shire rocks earnings estimates 
Irish biopharma Shire plc's (NASDAQ:SHPG) strategic decision to focus on drugs for rare diseases a few years back is paying dividends today -- quite literally. The company blew away Non-GAAP earnings per ADS estimates by 23% this morning, with fourth quarter earnings coming in at $2.26 per ADS. Revenue also beat estimates by $50 million.

Earnings came in much higher than expected because of double-digit growth in sales for most of the company's rare disease drugs, with overall annual sales growing by 19%.  Management also gave a rosy outlook for 2014 based on the acquisition of Viropharma and growing demand for the company's core products. Namely, Shire's management expects sales to continue to grow by double-digits this year, allowing them to increase the dividend by 15%.

What's my view? The market appears content to continue to pay a premium for earnings for orphan drugmakers like Shire. And unless there is a major policy change in the U.S. or EU in terms of pricing for these types of drugs, I expect this trend to continue for the foreseeable future. As such, you might want to keep a close eye on Shire going forward.  

Healthcare stocks have been some of the best performers of late, but this stock could be even better. 
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers