Mr. Market was a happy camper this week, with the Dow setting all-time highs. However, a few stocks in the health-care sector didn't join the party. Here are three of the most horrendous performers for the week.
Manufacturing a downturn
If at first you don't succeed, try, try again. But what if you try and still don't succeed? That's the question facing specialty pharmaceutical company Impax Labs (NASDAQ:IPXL). Shares plunged nearly 17% this week on news that a second inspection of a manufacturing facility by the Food and Drug Administration still found problems. It could have been even worse -- at one point during the week, shares were down nearly 27%.
An earlier inspection of the Hayward, Calif., facility was conducted in March 2012. Three of the issues cited in the most recent inspection were initially found last year but had not been corrected. The FDA also found nine new issues.
This situation has proved to be quite embarrassing for Impax and costly for its shareholders. The company stated that it is "working diligently" to address the problems and intends to respond to the FDA soon.
Medical-device maker AngioDynamics (NASDAQ:ANGO) saw its shares tumble 12% this week. The company badly missed analyst estimates for revenue and earnings in the last quarter.
The numbers were only preliminary, but they didn't look great. AngioDynamics said that revenue would probably come in at $82 million for the quarter ended Feb. 28. Analysts were expecting close to $88 million. The company expects to post earnings of $0.04 to $0.06 per share. Even the high end of that range is still well below the $0.09 per share analysts expect.
What happened? AngioDynamics CEO Joseph DeVivo said the company expected to build momentum in the quarter but was caught off-guard by softness in elective procedure volumes. However, DeVivo also maintained that the poor results should be temporary.
Shareholders in DepoMed (NASDAQ:ASRT) felt the heat this week after an FDA advisory panel rejected hot-flash drug Sefelsa. The stock dropped 9.5% on the decision.
The advisory panel voted 12-2 against recommending Sefelsa. The panel thought DepoMed's three studies didn't show that the drug actually reduced hot flashes in menopausal women. Without solid efficacy results, the panel thought the benefits weren't sufficient to overcome safety issues with Sefelsa. Side effects for the drug include dizziness, fatigue, balance problems, and increased suicidal thoughts.
What's next for DepoMed? The company has pulled the plug on all spending on Sefelsa in treating hot flashes for now. However, it continues to sell the drug under the brand name Gralise for managing postherpetic neuralgia. DepoMed also sells anti-inflammatory drug Zipsor and diabetes drug Glumetza, which partner Santarus (UNKNOWN:SNTS.DL) markets in the United States.
None of the above
I normally attempt to pick the best of the horrendous health-care stocks of the week, but this week I must admit that I'm stumped. It's hard to have much confidence in Impax Labs after failing an FDA inspection for the second time with three repeat issues.
AngioDynamics' woes could be only temporary, but I'd prefer to take a wait-and-see stance. As for DepoMed, I'm not overly concerned about the FDA decision on Sefelsa. However, the company's financial performance continues to be worrisome. My pick this week, therefore, is none of the above.