Tensions between Russia and Ukraine continue to escalate, and Wall Street continues to hate it. Investors chose to reduce their exposure to stocks today, given the risk that the situation gets dramatically worse during the weekend. Celgene Corporation (CELG +0.00%), Gilead Sciences (GILD 0.33%), and Priceline.com (PCLN +0.35%) ended as the three worst stocks in the S&P 500 Index (^GSPC 0.04%) Friday; the S&P lost five points, or 0.3%, to end at 1,841.
Two of the three most miserable performers today were biotech players. Celgene Corporation finished as the largest retreater in the 500-stock index, losing 4.2% in trading today. A pesky protection of intellectual property, the "patent," is to blame for Celgene's loss today, as a U.S. judge scheduled an earier-than-expected hearing on Revlimid, a blood disease treatment. While investors generally don't expect the patent challenge to cause problems, the fact that a small risk exists, and is now closer on the time horizon, worried investors.
Unlike Celgene, Gilead Sciences' patent woes aren't due to an earlier resolution in the courts, but a brand-new problem that just popped up. Idenix Pharmaceuticals initiated a patent infringement lawsuit against Gilead today, causing the stock to shed 3.8% in trading. Gilead's hepatitis C drug sofosbuvir is the subject of contention; Idenix claims it was first to patent the treatment in Europe. These two companies clearly aren't fond of each other, with Idenix filing two suits against Gilead in December. Investors should resist the temptation to equate lawsuits with valid plaints, since frivolous cases come through the courts all the time in the health-care industry.
Finally, shares of Priceline.com Incorporated stumbled 2.5% today, though there were no emerging patent fiascos for shareholders to worry about. Priceline.com shareholders haven't had much to worry about for years, actually, as the online travel booking industry has gone absolutely bonkers. Not only is Internet access on an irreversible trek toward ubiquity, but with the economic recovery and William Shatner as your pitchman, it's no wonder shares are up more than 1,500% in the last five years. On top of that, as my colleague Daniel James argues, impressive fourth-quarter performance from Priceline and its competitors show the industry is still flying high.
