1 Surprising Stock Drop that Makes Perfect Sense

Editor's Note: This video was filmed May 7th.

Biotechs Aegerion Phamaceuticals (NASDAQ: AEGR  ) and Isis Pharmaceuticals (NASDAQ: ISIS  ) reported earnings last week, and the market reacted pretty negatively to the news --  Isis lost about 4% after reporting, while Aegerion cratered 25%. Looking at the numbers, you might wonder if that was a transcription error.

After all, it was Isis whose revenue dropped to $28 million from $43 million in the year-ago first quarter. Isis also reported a wider loss, with a $0.27 loss per share comparing unfavorably to a $0.02 loss in first quarter of 2013. And Aegerion increased revenue -- in fact, it roughly doubled it to $40 million from $19 million in the year-ago quarter. And the company narrowed its net loss from $0.64 per share to $0.54 per share.

So, what happened?

In the video below, Motley Fool health care analysts Michael Douglass and David Williamson lay out why Aegerion lost so much more than Isis -- how analyst expectations and weaker-than-expected sales of the drug Juxtapid combined to sink the stock last week.

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  • Report this Comment On May 16, 2014, at 4:32 PM, Rifleman3006 wrote:

    You can't survive on one drug, especially when it's so high priced. The payor industry is trying to reduce the availability of high priced drugs not increase them. There is NOTHING that says the insurance carriers have to provide their members with such highpriced drugs such as juxtapid and I promise you they will not in the end.

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Michael Douglass

As the Motley Fool's Health Care Editor/Analyst, I focus on all things health care -- although my greatest interest is in the megatrends reshaping the American health care system, including the Affordable Care Act, Accountable Care Organizations, a shifting regulatory landscape, and the new drug discoveries fundamentally changing disease management and treatment.

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