3 Horrendous Health-Care Stocks This Weekhttp://www.fool.com/investing/general/2012/11/16/3-horrendous-health-care-stocks-this-week-5.aspx Keith Speights
November 16, 2012
The last five days proved yet again why investing in biotech can be a very risky proposition. Disappointing clinical trials, Food and Drug Administration panel decisions, and analyst downgrades can wreak havoc on these stocks. And they certainly did so this week. Here are three of the week's worst performers in the world of health care.
Another one bites the dust
At least Clovis is in good company. Others have shared similar fates in attempting to take on pancreatic cancer. Most recently, Amgen (Nasdaq: AMGN ) abandoned its phase 3 clinical trial for ganitumab after research found no significant improvement over current therapy. Celgene (Nasdaq: CELG ) still seems to be the best hope for a new pancreatic cancer drug.
Clovis intends to regroup by focusing on a few other drugs in its pipeline. Two are already in clinical studies. CO-1686 targets treatment of non-small-cell lung cancer, while rucaparib is intended for battling ovarian and breast cancer.
The devil's in the details
I must eat a big helping of crow on this one. After an FDA staff report came out earlier in the week singing the praises of Heplisav, I thought the vaccine would likely sail on through to FDA approval. Although I played devil's advocate to point out that the FDA staff report had no real bearing on the advisory panel decision, my optimism still prevailed.
The devil is truly in the details, though. Heplisav's efficacy isn't in question, but the panel voted eight to five (with one member abstaining) that the data didn't sufficiently support the safety of the vaccine. Dynavax could still win FDA approval, but the probability of doing so is definitely lower now.
How sweet it isn't