The S&P 500 Index ( ^GSPC 0.31% ) hit all-time highs today. Then it steadily declined for the remainder of the day, driven by a slumping health-care sector. With Symantec Corporation ( NLOK -1.33% ) being the lone exception, two of the three biggest losers in the stock market today were biotechs: Biogen Idec ( BIIB 3.48% ) and Alexion Pharmaceuticals ( ALXN ) both finished near the bottom of the S&P as inquisitive congressmen spooked investors.
Shares of Symantec Corporation, which makes computer antivirus software, plunged 12.9% as the company ditched its CEO. When a company faces a dismal and uncertain future -- as Symantec has in recent years -- an easy lever to pull in an effort to jump-start growth is the makeup of the executive team. But this is an all-too-familiar process for Symantec investors, who put their faith in Steve Bennett less than 24 months ago, only to see him sent off Friday. With the company's growth uncomfortably correlated to PC sales, Symantec might be out of levers to pull.
Now for something completely different and somewhat bizzare: Shares of Biogen Idec cratered 8.2% today, even as its hemophilia B drug Aprolix was approved for sale in Canada. The sudden drop is unquestionably a direct result of unforeseen pressure from three Democratic congressmen, who sent notice to Gilead Sciences requesting an explanation of the pricing methods behind its hepatitis C drug Sovaldi. The action could be seen as an indirect threat to high-cost treatments like Aprolix, which affects just 4,000 people in the U.S and will likely cost a small fortune.
The last of the day's laggards, Alexion Pharmaceuticals, shed 8% Friday. Biogen and Alexion shares are both up more than 70% in the last year as the biotech industry's taken off with insane momentum. Expectations in the area are high, to say the least. On top of that, Alexion's only approved drug, Soliris, appears to fall under the purview of congress' crusade against high-cost treatments: the product costs $400,000 a year. That said, companies can only afford to reduce the commercial price of orphan drugs by so much, because the cost to develop the drug must be economically rewarding for public companies to produce it to begin with.