Veru (VERU -1.36%), a high-flying cancer and COVID-19 stock, is in full-on retreat mode today. Specifically, the biotech's shares were down by a hefty 17%, on average volume, as of 12:38 p.m. ET Tuesday afternoon.
What's causing investors to head for the exits today? The good news is that Veru didn't release any material news today, so its value proposition hasn't suddenly changed. The bad news is that investors appear to be profit-taking across the varied healthcare landscape today in response to the Federal Reserve's plans to continue raising interest rates in 2023.
Thanks to the sizable commercial potential of its severe COVID-19 therapy known as sabizabulin, Veru's share price shot up by an astronomical 198% at its peak earlier this year. Veru thus stands out as a top target for profit-taking, especially in this increasingly risk-averse environment.
Keeping with this theme, most of the top-performing healthcare stocks in 2022, such as Axsome Therapeutics and Siga Technologies, are also deep in the red today. Healthcare investors don't seem willing to take any chances with additional rake hikes on the horizon.
Is this double-digit drop in Veru's share price a buying opportunity? I think so. Sabizabulin should fill a critical gap in the care for hospitalized COVID-19 patients. As a result, the drug should garner a healthy level of sales if it does indeed get approved for this indication by the U.S. Food and Drug Administration. Therefore, bargain hunters may want to take advantage of this weakness in Veru's shares today.