Tuesday featured broad-based gains from major stock market indexes, reflecting positive sentiment stemming from comments that Fed Chair Janet Yellen made about the U.S. economy and the central bank's likely course of future action with respect to monetary policy. Going into the chair's comments, the market was slightly down, but Yellen suggested the Federal Reserve might be slower in implementing future rate increases than investors had expected. That sparked an afternoon rally that sent the Dow up nearly 100 points. However, some stocks missed out on the gains, and Medivation (MDVN), Puma Biotechnology (PBYI 4.51%), and Synnex (SNX -0.63%) were among the relatively small number of decliners in Tuesday's market action.
Medivation fell 6% after the maker of prostate cancer drug Xtandi attracted the attention of certain influential members of Congress, including presidential candidate Bernie Sanders. A course of treatment for Medivation's drug carries a six-figure price tag in the U.S., but other countries have negotiated lower prices for Xtandi, and lawmakers would like to seek ways to force the company to cut its price domestically as well. Medivation partner Astellas responded that most patients with private insurance or Medicare pay minimal out-of-pocket costs, and the manufacturer provides Xtandi free for many eligible uninsured or underinsured individuals who need the treatment. Nevertheless, the company is just the latest of several drug companies that have come under fire for high-priced treatments, and it's unclear whether the political climate will improve or worsen in the months ahead.
Puma Biotechnology plunged 21% following news Monday night that the company would delay its new drug application for its prospective extended adjuvant breast-cancer treatment neratinib until the middle of the year. Puma said it had discussed preclinical data with the FDA along with Phase 2 and 3 trial data for neratinib, and the FDA's response included a request to amend certain analysis under the trials to incorporate regulatory recommendations. Even though the request doesn't really call into question the positive results the trials have shown so far, investors are clearly impatient and disappointed that Puma won't be able to meet its goal of filing for approval for neratinib during the first quarter.
Finally, Synnex dropped 7%. The business-process services company reported its fiscal first-quarter results Monday night, and investors reacted negatively to slight declines of 2% in revenue and 6% in adjusted net income. Adverse foreign currency movements accounted for much of the sales decline in the company's technology services unit. However, Synnex's guidance for the fiscal second quarter was well below what investors were looking to see, including sales expectations of $3.25 billion to $3.35 billion and adjusted earnings of $1.27 to $1.33 per share. Despite CEO Kevin Murai's assertions that Synnex is poised to capitalize on opportunities for growth, investors want Synnex to show them that growth before they're willing to send the stock back toward its all-time highs.