Stocks opened higher on Monday, but moved lower during the session as concerns about the economic crisis in Turkey continued to weigh on the market. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) both lost ground.
Today's stock market
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Energy was the weakest sector, with the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) falling 2.5%. Homebuilding companies plunged following last week's comments from Redfin; the iShares US Home Construction ETF (NYSEMKT:ITB) tumbled 2.9%.
Alnylam wins its first drug approval
Alnylam Pharmaceuticals announced the landmark FDA approval for its first commercial drug on Friday, but investor concerns about pricing and a conservative decision by the agency on the drug's label threw cold water on the celebration today, causing the biotech's stock to fall 6.6%. The FDA approved Onpattro (patisiran) for treatment of polyneuropathy caused by the rare and potentially fatal disease hereditary transthyretin-mediated (hATTR) amyloidosis.
Alnylam believes that there are 20,000 to 30,000 patients worldwide with the indication the FDA approved, with 10,000 to 15,000 of those in the U.S. However, the disease is underdiagnosed, and there are currently less than 3,000 diagnosed cases in this country. Alnylam set the list price of the treatment at $450,000 per year, or $345,000 after discounts.
Causing some concern among analysts on the call, though, was Alnylam's agreement with payers for value-based pricing. The company will get the full price for patients that respond well to the treatment, but will have several levels of discounts if results are "suboptimal." Alnylam said these discounts are not included in the $345,000 pricing guidance, and it was unwilling to estimate what they would amount to, throwing considerable uncertainty into revenue forecasts.
Furthermore, the company had hoped that trial results showing cardiac benefits could be mentioned on the drug's label, giving it an advantage over competition from Ionis Pharmaceuticals and Pfizer. The FDA disallowed that, saying that Alnylam's clinical results were not sufficient to firmly establish those benefits.
The first U.S. approval of a drug for hATTR amyloidosis was a historic event, but investors weren't quite ready to celebrate until pricing and competitive issues come better into focus.
Sysco rises on profit growth
Shares of Sysco gained 6.2% after the food distribution giant reported solid earnings for its fiscal fourth quarter. Sales increased 6.2% to $15.3 billion, about what analysts were expecting. Adjusted earnings per share soared 30.6% to $0.94, edging out the analyst consensus by $0.01.
Domestic sales increased 6.1% to $10.4 billion, with total case volume within U.S. broadline operations growing 5.3%. U.S. food cost inflation was 1.1%, which was down from 2.6% last quarter. International sales had stronger growth, rising 7.9% to $2.9 billion. Gross profit increased 5.7% to $2.9 billion and gross margin fell by 9 basis points. Adjusted operating income rose 15.7% from the period a year earlier. For the full year, sales grew 6.1% to $58.7 billion and adjusted earnings per share jumped 26.6% to $3.14.
"Overall, I am pleased with our performance in fiscal 2018, which culminated in the successful delivery of our initial three-year plan, including the achievement of our adjusted operating income growth target," said CEO Tom Bene in the press release.