Every week, we look through all of the health-care universe searching for the stocks that experienced the agony of defeat. And every week, we find 'em. Here are three of the most humongous health-care stocks for the market week ending Jan. 11, 2013.

Trying to find a silver lining
Arqule (ARQL) shares plunged nearly 16% this week. Most of the decline occurred on Friday, after the company and partner Daiichi Sankyo announced that colorectal cancer drug tivantinib failed to meet its primary endpoint of progression-free survival in a phase 2 study. 

Although the news wasn't great, Daiichi Sankyo, which conducted the study, did find some positive takeaways. Median progression-free survival rates for patients taking tivantinib in combination with irinotecan and cetuximab were 8.3 months, compared to 7.3 months for patients taking irinotecan and cetuximab, plus placebo. Daiichi Sankyo VP of Clinical Development-Oncology said that his company was "encouraged" by the findings.

Tivantinib had another setback in October, when Arqule and Daiichi Sankyo announced that they were stopping a planned phase 3 trial for the drug in combination with erlotinib in the treatment of non-small cell lung cancer. Is there any silver lining in all of these dark clouds? Yes, at least for now. Arqule still plans to move forward with a phase 3 study for tivantinib, targeting treatment of liver cancer.

Upstaged
Strong revenue growth? Check. Beat analyst expectations? Check. Shares drop by almost 14%? Check. That's the week in brief for genetic testing company Sequenom (NASDAQ: SQNM).

Despite announcing good preliminary results for 2012 at the beginning of the week, Sequenom shares fell in the double digits. The main culprit for the decline was that Illumina (ILMN -1.28%) announced an acquisition of Verinata Health, a privately-held company that competes against Sequenom in the Down syndrome prenatal testing market.

While Sequenom's MaterniT21 Down syndrome prenatal tests are driving its growth, the company still obtains a significant portion of revenue from its genetic analysis business segment. During the first nine months of 2012, genetic analysis accounted for 55% of total revenue. That number is shrinking, though. During the same period in 2011, the segment made up 86% of revenue.

"Semi-reset"
Idenix (NASDAQ: IDIX) shares fell 13% this week. The decline appears to be largely related to remarks made by company CEO Ron Renaud at the 31st Annual J.P. Morgan Healthcare Conference.

Renaud stated that Idenix was making a "semi-reset" with respect to its approach for two experimental hepatitis C drugs, IDX184 and IDX19368. The FDA halted clinical studies of the drugs in August after a patient taking a similar drug developed by Bristol-Myers Squibb (BMY -0.27%) died. Idenix now says that it could drop the program and, instead, pursue another path using another class of drugs.

It doesn't appear that Indenix is definitely throwing in the towel on IDX184 and IDX19368, although the future is uncertain. The company maintains that it still thinks there are "significant differences" between its drugs and Bristol's drug. Idenix expects a response from the FDA about next steps within three months. 

Best of the worst
Which is the best of this week's worst stocks? I'm not sure that Arqule will find the success it has been hoping for with tivantinib. Idenix could come back strong, but the situation is still very murky.

In Sequenom's case, though, I think that the market probably overreacted. Even if Illumina's buy of Verinata intensifies competition, Sequenom should still do well over the long run. This horrendous week could set up investors for future gains with this stock.