While the overall stock market was flat in 2015, there were naturally some big losers, especially among small-cap companies (those with market caps in the range of $300 million to $2 billion), which tend to be more speculative and volatile. 2015's three worst-performing (by total return, which takes dividends into account) companies that fell into the small-cap classification and had stock prices over $5 at year end were Iconix Brand Group (NASDAQ:ICON), Teekay Corporation (NYSE:TK), and Chimerix (NASDAQ:CMRX).  

One thing to note is that some data screens might show Windstream Holdings and SPX Corp. topping the worst-performing list, and if you just look at the numbers, it's easy to be duped. What's missing here is that these screens don't automatically adjust returns, as they should, to account for the shares of the spin-offs that investors in each of these companies received in 2015. So, without further ado, here are the worst performing small caps from 2015:

1. Iconix Brand Group -- down 79.8%

Source: Iconix Brand Group.

Iconix Brand Group is a brand management company that owns and licenses brands in the apparel, footwear, and home-goods spaces. The New York City-based company's better-known brands include Joe Boxer, Ed Hardy, London Fog, and Sharper Image. While Iconix primarily licenses its brands to retailers and wholesalers, it also sells some products itself. In recent years, the licensing-heavy business model had been a winner -- or an apparent one, as we'll get to: Not only were revenue and earnings generally rising nicely through 2014, but free cash flow has been especially strong. 

Iconix's stock huge reversal of fortunes in 2015 started when concerns about its accounting practices and growth power surfaced in a series of short-seller reports early in the year. Several top execs abruptly resigned. Then in November, the stock plunged when the company slashed earnings guidance for the full year 2015 and announced that it would restate financial results for fiscal years 2013 through 2015. The bottom dropped out again on Dec. 28 when the U.S. Securities and Exchange Commission announced it was launching an official investigation. 

The stock has been beaten down to such low levels -- it's trading at 4.5 times forward earnings and sports a five-year PEG (P/E to projected growth) of 0.2 -- that investors may be tempted to scoop up some shares. Most investors, however, should probably pass on an attempt at bottom-fishing. While new top management is in place and the company has pledged to fully cooperate with the SEC, risks remain. Notably, the outcome of the SEC investigation is unknown and the company is facing class action lawsuits over its accounting issues. 

2. Teekay Corporation -- down 79.8%
Teekay Corporation operates in the marine midstream space through its ownership of the general partners and a portion of the outstanding limited partner interests in Teekay LNG Partners L.P. and Teekay Offshore Partners L.P. Additionally, Teekay has a controlling ownership interest in Teekay Tankers Ltd. and directly owns a fleet of vessels. As of the Nov. 5 release of its third-quarter 2015 results, Teekay parent company's transition into a pure-play general partner of the two master limited partnerships noted above was largely complete. 

Source: Teekay Corp.

Teekay's stock steadily dropped throughout the year primarily due to the poor market conditions resulting from the price of oil plunging. The final dagger came on Dec. 17, when the market pummeled the stock more than 60% after the company announced the day before that it was slashing its dividend by 90%.  This dividend cut was in response to announcements by Teekay Offshore and Teekay LNG that they plan to reduce their respective dividends. While investors obviously didn't like the move, conserving cash is the responsible thing for the companies to do. The two LPs plan to use a significant portion of their internally generated cash flow to fund their future growth projects and reduce debt levels. 

3. Chimerix -- down 77.8%
Chimerix is a biopharmaceutical company that develops and commercializes oral antivirals to address unmet medical needs in the United States. The Durham, N.C.-based company's lead compound, brincidofovir (CMX001), was in phase 3 clinical trials for the prevention of cytomegalovirus (CMV) in adult hematopoietic cell transplant recipients -- but the drug recently failed, which we'll get to. Chimerix also is studying the the drug as a potential treatment for adenovirus infection. Its second key compound is CMX157 for the treatment of HIV and hepatitis B virus infections. Its preclinical testing product is CMX669 for the treatment of BK virus and CMV. The company has a license agreement with ContraVir Pharmaceuticals for the development and commercialization of CMX157 for certain antiviral indications, and BARDA to develop brincidofovir for the treatment of smallpox.

Chimerix could be the poster child for the volatility inherent in small biopharmas and biotechs, especially ones with no approved drugs. The stock plunged 81% on Dec. 28 after the company announced that brincidofovir failed in a phase 3 study as a potential preventative treatment for CMV infections in patients undergoing hematopoietic cell transplantation. 

Prior to this event, the stock had been chugging along ok in 2015. The market was apparently pretty confident that brincidofovir would cruise through the Phase 3 trial and eventually receive FDA approval as a preventive treatment for CMV. Chimerix's management said in the press release that it will be reviewing the data to try to determine why the results differed substantially from those of the phase 2 study. While a huge setback, it remains to be seen whether the drug will remain a no-go for this indication. The drug, as previously mentioned, is also being studied as a treatment for asadenovirus infections and smallpox. The stock's pop in July, in fact was due to Chimerix's announcement of positive topline results from a pivotal study of an animal model for smallpox. 


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