Tuesday’s Top Health Care Stories: Halozyme, Insys, Pfizer, and AstraZeneca

Halozyme, Insys, Pfizer, and AstraZeneca are the top health-care stocks to watch on Tuesday morning.

May 13, 2014 at 9:20AM


Let's take a look at four stocks -- Halozyme (NASDAQ:HALO), Insys Therapeutics (NASDAQ:INSY), Pfizer (NYSE:PFE), and AstraZeneca (NYSE:AZN) -- that could all make waves across the health-care sector this Tuesday morning.

Halozyme rises on a positive opinion regarding its halted PEGPH20 trial
Halozyme was up more than 11% in pre-market trading after an independent data monitoring panel supported the continued enrollment of patients for a phase 2 trial of the company's experimental pancreatic cancer treatment.

Halozyme in April halted enrollment and dosing in the phase 2 trial of PEGPH20, which is an advanced version of its intravenous drug delivery system for chemotherapy. Halozyme stated that the decision was a "precautionary measure" to evaluate potential issues with blocked blood vessels. That announcement caused Halozyme shares to plunge more than 32% on April 4.

If the drug is approved, Jefferies analyst Eun Yang believes PEGPH20 could be launched in the U.S. and Europe by 2019, and generate peak sales of $548 million by 2027.

Halozyme also reported a wider first-quarter loss yesterday, due to higher expenses related to PEGPH20 and its programs for Hylenex. Hylenex breaks down a structural component of the skin to allow certain drugs to be injected subcutaneously. Halozyme revenue inched up 1.7% year over year to $12 million. However, the company reported a net loss of $0.22 per share, compared to a loss of $0.17 per share in the prior-year quarter.

Insys weighed down by weak first-quarter earnings and fraud allegations
Insys Therapeutics this morning reported its first-quarter earnings, missing consensus estimates on both the top and bottom lines. Insys earned $0.23 per share, or $7.7 million, on revenue of $41.6 million. Analysts had expected earnings of $0.28 per share on revenue of $45.6 million.

The majority of Insys' revenue is generated from sales of Subsys, a sublingual spray for breakthrough cancer pain. During the quarter, revenue from Subsys sales climbed 319% year over year to $40.7 million. Prescriptions for Subsys rose 15.3% sequentially, according to IMS data. Insys expects Subsys revenue to continue rising to $52 million in the second quarter.

Investors should note that Insys stock plunged more than 15% on Monday after Dr. Gavin Awerbuch -- a doctor responsible for 20.3% of Subsys prescriptions to Medicare beneficiaries between 2009 and 2014 -- was charged with fraud in federal court in Detroit. Medicare paid Awerbuch $6.9 million between Jan. 1, 2009, and Feb. 6, 2014, for Subsys prescriptions.

In response to those charges, Insys said it has expanded its commercial organization since the launch of Subsys, and that no single physician has written more than 5% of all Subsys prescriptions in 2014.

Bearish comments on Monday from Bronte Capital analyst John Hempton criticizing the company's "incentive-based pay structure" and aggressive sales tactics also kept the stock under pressure. However, Wells Fargo analyst Michael Faerm stated that the sell-off was "overdone" and maintained an outperform rating on the stock with a price target of $58 to $60.

Shares of Insys were down nearly 6% in pre-market trading this morning. However, the stock is still up more than 280% over the past 12 months.

All eyes on Pfizer and AstraZeneca
Last but not least, investors should keep a close eye on Pfizer's proposed acquisition of AstraZeneca. AstraZeneca CEO Pascal Soriot today told a committee of British lawmakers that "It's impossible to say we would never accept any offer."

AstraZeneca, Britain's second-largest pharmaceutical company, has rejected three takeover offers from Pfizer since January -- the latest of which was a $106 billion cash and stock offer. AstraZeneca has repeatedly stated that Pfizer's proposed deal undervalues the company and could disrupt research on its lucrative pipeline of new drugs.

Pfizer, which trails many of its industry rivals in oncology, would benefit from adding AstraZeneca's growing portfolio of cancer drugs to its own newer cancer treatments such as Xalkori and Inlyta.

Meanwhile, the British Parliament's Business Innovation and Skills Committee questioned Pfizer CEO Ian Read regarding potential job losses in the U.K. and the protection of prior research. Both issues are key points of contention among opponents of the potential takeover.

Will this stock be your next multi-bagger?
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Leo Sun 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