The fireworks started early for several health-care stocks this week. Amidst a somewhat gloomy overall market outlook, a handful of stocks saw solid gains. Here are three humongous health-care performers for the last week of 2012.
Righting the ship
Rite Aid (NYSE:RAD) continued to claw its way back this week, climbing 12%. This makes the second week in a row that the pharmaceutical company landed on our humongous health-care stocks list.
Last week, Rite Aid reported positive quarterly results that served as a catalyst for the stock's ascent. That momentum carried over into this week. News that the company returned to profitability for the first time in five years definitely is worth the market celebrating for more than just a few days.
Rite Aid was able to post a profit even though revenue declined slightly compared to the prior year. That's because the revenue decrease stemmed from increased sales of generic drugs. While those generics bring in less total revenue, they also are more profitable to the pharmacy chain.
The company also benefited from the squabble between its competitor Walgreen (NASDAQ:WBA) and large pharmacy benefits manager Express Scripts (NASDAQ:ESRX). While that dispute was ultimately settled, some customers who drifted to Rite Aid could stay with the pharmacy.
Aeterna Zentaris (NASDAQ:AEZS) shares jumped more than 11% this week. The increase stemmed from news that the FDA agreed on a Special Protocol Assessment phase 3 trial design for the company's experimental endometrial cancer drug AEZS-108.
The upcoming clinical study will involve around 500 patients with endometrial cancer, the most common form of uterine cancer. AEZS-108 will be compared with doxorubicin as a second-line treatment for the cancer in hopes of improving overall survival rates.
This good news provided some year-end cheer for Aeterna Zentaris. The company hasn't had much to be cheerful about in 2012. In April, it announced that a phase 3 trial of perifosine targeting treatment of colorectal cancer failed to improve overall survival rates compared with placebo. The stock has languished since then, although a 6-to-1 share consolidation undertaken in October to regain Nasdaq compliance made its chart look better superficially.
Back at Ack
Herbalife (NYSE:HLF) rounds out our final weekly humongous health-care stocks for 2012. Last week, the company made the list of worst health-care performers after an all-out attack launched by hedge fund manager Bill Ackman. This week, Herbalife gained nearly 8%.
Are Ackman's claims less believable this week than they were just a few days ago? Maybe and maybe not. However, the more likely reason for Herbalife's resurgence is that the company's counterattack plans could have calmed investors down a bit.
Last week, the company announced an analyst day scheduled for Jan. 7. Earlier this week, Herbalife stated that it had retained Moelis & Company as a "strategic advisor." The company also engaged a prominent law firm in connection with Ackman's allegations.
Despite the partial recovery this week, shares of Herbalife are still down more than 30% from before Ackman went public with his allegations. You can bet this story will carry over well into the new year.
No one knows for sure what 2013 will bring. One thing you can count on, though, is that the health care sector will continue to have stocks that skyrocket -- and some that crash -- every week. We'll be there to point them all out. From the Fool and myself to all of our readers: Happy New Year!
Keith Speights has no positions in the stocks mentioned above. The Motley Fool owns shares of Express Scripts. Motley Fool newsletter services recommend Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.