Stocks ended a week of all-time highs with another day of strong gains as investors began to look forward to earnings reports coming next week. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) posted record closes, with the industrial and consumer discretionary sectors leading the way.
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As for individual stocks, Illumina (NASDAQ:ILMN) warned of a revenue shortfall, and Novartis (NYSE:NVS) and Amgen (NASDAQ:AMGN) announced the failure of a candidate drug treatment for Alzheimer's disease.
Illumina warns of sales weakness
Shares of Illumina plunged 16.1% after the gene sequencing leader issued preliminary results for the second quarter that warned of disappointing sales and lowered guidance for the full year. Illumina said it expects to report that second-quarter revenue grew 0.6% to $835 million, about $45 million less than analysts were expecting. The company guided to full-year revenue growth of 6%, less than half the 13% to 14% it had previously forecast.
Illumina said $30 million of the revenue shortfall was associated with population genomics initiatives, including a delay in a big deal expected to close later in the year. About $10 million was due to weakness in the direct-to-consumer market, and $10 million resulted from softness in the company's lower-throughput systems.
Illumina's share price had run up recently, and today's move just returns it to where it was less than two months ago. But the full-year guidance implies that second-half revenue will be about $200 million less than it had anticipated, and investors will have to wait until the earnings report on July 29 to understand why a slowdown in growth is continuing.
More bad news for Alzheimer's patients
The latest failure of a drug to treat Alzheimer's disease was announced yesterday, when Novartis and Amgen said they were discontinuing work on CNP520, or umibecestat, which was in late-stage clinical trials. The companies said that a pivotal phase 2/3 study was halted after an assessment identified a worsening of cognitive function and the potential benefit for participants didn't outweigh the risk. Shares of Novartis fell 2.4% and those of Amgen slipped 1.7% on the news.
CNP520 was designed to bind to amyloid proteins that develop into plaques in the brains of Alzheimer's patients and was being tested in people at high risk for developing the disease based on age and genetics. Novartis and Amgen hoped that the drug would delay or prevent the onset of Alzheimer's.
The failure is just the latest among several attempts to treat Alzheimer's by attacking amyloids. Biogen and Eisai recently threw in the towel on aducanumab, joining other busts by Merck, Eli Lilly, and others. The amyloid hypothesis may be dead at this point, and Biogen's BAN2401 candidate treatment could be the next to fall.