If the first few months of the year were a party, this week was a reminder that the stock market can still dole out some pain. Though headlines at the beginning of the week talked about a market "plunge," the drop for the week really wasn't all that bad. Even so, if Alcoa's estimate-topping earnings report hadn't helped pull the market back up for a couple of days, the bloodletting could have been even worse.
By the time the dust had settled on Friday, the Dow Jones Industrial Average (INDEX: ^DJI) had shed 1.6%, while the broader Russell 3000 lost 2%. Though the broad market may not have actually plunged, there were a handful of stocks that most definitely did.
The week's big losers
The U.S. Food and Drug Administration threw a bucket of cold water on ViroPharma's (Nasdaq: VPHM) stock this week, as it shot down a petition to keep Watson Pharmaceuticals from launching a generic version of its colitis treatment, Vancocin. This is no small matter for ViroPharma, since, as my fellow Fool Sean Williams pointed out, Vancocin accounted for $289 million of the company's $544 million in sales last year. Of course, while it's hard to think about that as anything but worrisome, biotech maven Brian Orelli noted that the long-expected entry of a Vancocin generic may make ViroPharma easier to value.
InterMune (Nasdaq: ITMN), meanwhile, took it on the chin after an analyst from Jefferies reiterated its "underperform" rating on the stock and dropped his price target from $10 to $9. Notably, Jefferies has clearly been the voice of caution on the company, while many other Wall Street firms have more optimistic ratings on the stock as well as significantly higher price targets. However, it appears that the rest of the Street may be cooling to InterMune as well. During the week, RBC Capital downgraded the stock to "sector perform" while cutting its price target from $23 to $17 and Stifel Nicolaus dropped its price target from $39 to $32.
The 3 Worst-Performing Russell 3000 Companies
|
Company |
Weekly Price Change |
|---|---|
| ViroPharma | (26.8%) |
| Molina Healthcare | (26.4%) |
| InterMune | (25.4%) |
Source: S&P Capital IQ. Weekly price change is April 6-April 13. Includes only companies with market caps of $250 million or more.
Also among the week's worst performers were Idenix Pharmaceuticals (Nasdaq: IDIX) and Swisher Hygiene (Nasdaq: SWSH).
For a drug developer like Idenix, any signs that a key drug will have a tougher time than expected making its way to market are bound to shake up investors. In Indenix's case, it appears that investors are continuing to back away a week after an analyst from Brean Murray shared a pessimistic view on the future of Idenix's hepatitis-C treatment, IDX184. Not that any of this was particularly surprising to some Fools.
Like Idenix, Swisher's stock stayed on a downward trend this past week as investors continued to distance themselves from the company after it revealed an internal financial review and said past financials would have to be restated. While there may not have been huge new bombshells this week, the ugliness of the situation was kept front and center for investors as a wave of lawsuits rolled in and the company said that because of the investigation it won't file its 10-K by the extended due date and, as a result, will fall out of compliance with the stock exchanges that list it. My take? I like boring, dirty businesses like bathroom sanitation as an investment, but given the way Swisher has been managed, I'm staying far, far away.
At week's end, Idenix had slid nearly 14%, while Swisher had 15% hacked off of its share price.
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