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3 Humongous Health-Care Stocks This Week

By Keith Speights - Apr 12, 2013 at 5:20PM

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Two drugmakers, and one drug retailer. These three health-care stocks experienced a humongous week.

Cracking our list of the most humongous health-care stocks wasn't an easy proposition this week. The bar was raised so high that even stocks with 15% gains didn't make the cut. Which did make it? Here are three of this week's best performers.

One and done
No more tests required. That's the word from the Food and Drug Administration to Acadia Pharmaceuticals (ACAD -2.25%) this week. Acadia's shares skyrocketed more than 60% on the news.

Acadia planned to conduct a second late-stage study for pimavanserin, its experimental drug for treatment of Parkinson's disease psychosis. However, the FDA will now allow results from the company's first phase 3 trial, along with data from other studies, to be used in submission of the New Drug Application, or NDA, for the drug.

The second study was scheduled to begin later this month, but now has been canceled. Acadia should submit the NDA for pimavanserin in late 2014.

Right direction
Things keep looking better and better for drugstore chain Rite Aid (RAD 7.65%). The company reported its first yearly positive earnings since 2007 this week. Shares jumped 35% on the accomplishment.

Not only did Rite Aid return to profitability, the company did it with style. Adjusted 2012 EBITDA of $1.12 billion was the highest ever for Rite Aid. The drugstore chain reported fourth-quarter earnings of $0.13 per diluted share -- much better than the $0.18 per-share loss recorded in the same period of the prior year.

The only seemingly negative item for Rite Aid was that revenue in the fourth quarter was $6.5 billion, down from $7.1 billion in the prior year. However, those numbers aren't apples-to-apples comparisons, because the most recent quarter was one week shorter than the fourth quarter from a year earlier.

Encore appearance
It seems like only yesterday that Astex Pharmaceuticals (NASDAQ: ASTX) made our list of humongous health-care stocks. It wasn't yesterday, but Astex was in our top three just last week. Shares moving up 18% this week enabled the company to make an encore appearance.

What's the catalyst this time around? Researchers from Indiana University reported at the American Association of Cancer Research that studies show Astex's experimental drug SGI-110, in combination with platinum, significantly delayed ovarian cancer tumor growth compared to platinum alone. Astex also announced that the company is expanding its ongoing phase 2 study of SGI-110 in the treatment of myelodysplastic syndromes and acute myeloid leukemia to include more patients. 

Astex shares have surged 117% so far in 2013. The company's primary product, cancer drug Dacogen, continues to experience strong sales, although it could face the threat of generic rivals within the next year.  

Best pick
Which is the best pick of our three humongous stocks of the week? They all have plenty of potential. I wouldn't be surprised if Acadia pulls back somewhat, though, at least in the short term. Any blips in Dacogen sales could hurt Astex's shares, although things look good for now. 

I'm going to go this week with Rite Aid. The turnaround story is compelling. My view is that the stock should continue its positive momentum.

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Stocks Mentioned

Rite Aid Corporation Stock Quote
Rite Aid Corporation
RAD
$5.13 (7.65%) $0.36
Acadia Pharmaceuticals Stock Quote
Acadia Pharmaceuticals
ACAD
$15.62 (-2.25%) $0.36

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