That's the best description for the performance of a handful of biotech stocks in 2015. Four biotech stocks with market caps over $250 million managed to lose more than 65% of their market cap during the year. Here's a rundown of which ones they were -- and how they failed so miserably.
During the first few months of the year, OvaScience's (NASDAQ: OVAS) stock held its own. The first round of bad news for the biotech, though, came on March 26, when the company announced results from studies of its Augment fertility treatment for women. Shares plunged around 40% over the following weeks.
Were the results that bad? Not on the surface. OvaScience reported nine clinical pregnancies out of 17 embryo transfers. Detailed parsing of the results, however, highlighted some concerns. There were 28 patients in the study, 26 of whom underwent the Augment treatment. Also, the average age of the women who became pregnant was 33 -- relatively young for in vitro fertilization.
In June, OvaScience announced more Augment treatment results. Despite seemingly good news, the stock tanked yet again. Skeptical investors still weren't convinced that the company's studies were solid.
They say that bad news comes in threes. For OvaScience, that saying rang true this year. The company announced on Sept. 28 that it didn't expect to meet its goal of 1,000 Augment treatment cycles in 2015. Shares were pummeled the next day, opening more than 37% below the previous close. The combination of all this negativity resulted in OvaScience losing three quarters of its market cap during 2015, ranking it among the worst-performing large biotech stocks of the year.
2. MannKind Corp.
Things didn't look much better for MannKind (MNKD -1.11%) in 2015. Shares of the biotech sank just over 70% due to a series of disappointing sales results for its inhaled insulin treatment, Afrezza.
Sales for Afrezza started out slowly after MannKind and partner Sanofi launched the product in February. Unfortunately, the situation only worsened from that point. Shipments of Afrezza declined each quarter.
By late November, MannKind CEO Hakan Edstrom was gone. That left 90-year-old founder Al Mann at the helm once again. Despite Mann's personal popularity, the change didn't leave investors feeling warm and fuzzy. The stock continued to fall in December, landing MannKind on the list of the year's worst-performing biotechs.
3. Arbutus Biopharma Corporation
For Arbutus Biopharma (ABUS -0.87%) shareholders, 2015 delivered a dramatic reversal of fortune. The year started off great for Arbutus, known previously as Tekmira Pharmaceuticals. The company's stock shot up over 75% by the end of January following the announcement of a merger with OnCore Biopharma. Then came the downward slide.
Excitement over the OnCore deal fizzled out. A secondary public offering in March generated plenty of cash, but caused share prices to fall because of dilution. In June, Arbutus announced that its mid-stage clinical study of a potential Ebola treatment would likely fail.
Arbutus did have some good news during the year. TKM-HBV, the biotech's experimental hepatitis B drug, advanced to a phase 2 clinical trial. That positive development wasn't enough to turn things around, though. Arbutus shares ultimately fell a hair under 70% for the year -- over 87% off its late January high mark.
4. Orexigen Therapeutics (NASDAQ: OREX)
Obesity drugmaker Orexigen Therapeutics seemed to be on the right track early in 2015. The stock was up almost 40% in early March. The good times didn't roll for long, though.
On May 12, Orexigen announced that the termination of the Light study, a clinical trial comparing cardiovascular outcomes of the company's obesity drug Contrave to placebo. Orexigen also revealed a dispute with partner Takeda Pharmaceuticals over their collaboration agreement for Contrave. Shares of the small biotech nosedived on the news.Orexigen and Takeda announced on August 6 that they had resolved their differences, but Orexigen's stock continued its downward slide.
The challenge for Orexigen was and is that the FDA still requires a cardiovascular study of Contrave. Takeda won't pick up the tab, so Orexigen will have to pay for the study, which is estimated to cost $210 million. The combination of 2015's run of bad news resulted in the biotech losing around 70% of its value during the year.
Rising from the ashes?
Can any of these stocks rebound in 2016? It's possible.
There's lots of potential for OvaScience's Augment in vitro fertilization treatment, although the company's drugs aren't available in the U.S. Likewise, MannKind's Afrezza could have plenty of potential if reimbursement issues can be overcome. Arbutus just might have an eventual winner on its hands with its hep-B drug. Orexigen's Contrave could become the clear obesity drug of choice.
But while each of these biotechs has potential, they also all come with significant risks. What goes down doesn't necessarily bounce back. And for these four stocks, there'd be quite a lot of bouncing needed.