While many investors worried about the Nasdaq’s three-hour shutdown this week, shareholders of a few stocks probably wished it wouldn’t have come back up. Here are three horrendous health-care stocks this week.
Groans from Crohn’s study
ChemoCentryx Inc (NASDAQ:CCXI) gets the dubious honor of being the most horrendous health-care stock of the week. Shares of the biotech plummeted 31% this week on disappointing late-stage results for its Crohn’s disease drug vercirnon.
On Friday, GlaxoSmithKline plc (ADR) (NYSE:GSK), which licensed vercirnon in 2010, announced that the drug failed to meet primary or secondary endpoints in a phase 3 study for treating Crohn’s disease. The big drugmaker has three other studies in process with vercirnon for the same indication, but it suspended enrollment and dosing while the latest results can be analyzed further.
While ChemoCentryx Inc (NASDAQ:CCXI) took a big hit with the disappointing news, the biotech isn’t entirely dependent on vercirirnon. It has a diabetic nephropathy drug in phase 2 development and a couple of drugs in phase 1 studies. Glaxo also licensed a rheumatoid arthritis drug from ChemoCentryx and has an option to license another drug.
New wearing off?
It’s been less than a month since Agios Pharmaceuticals Inc (NASDAQ:AGIO) closed its initial public offering.Agios shares fell nearly 19% this week. Is the newness wearing off already?
There really wasn’t any bad news for Agios Pharmaceuticals Inc (NASDAQ:AGIO) this week. Several analysts initiated coverage, but none were overtly negative. J.P. Morgan was perhaps the least optimistic, starting coverage with a “neutral” recommendation. However, the firm set a $35 price target — well above where Agios currently trades.
What we’re probably seeing with Agios Pharmaceuticals Inc (NASDAQ:AGIO)’ drop is simply profit-taking. The IPO price was $18 per share. Anyone who was in on the IPO and sold at the lowest level this week still made a nice 36% gain in just a few weeks.
Another relative newbie, Prosensa Holding NV (NASDAQ:RNA), also experienced a rough few days. Shares dropped 16% this week following the announcement last Friday of phase 2 clinical results for Duchenne muscular dystrophy, or DMD, drug drisapersen.
Prosensa Holding NV (NASDAQ:RNA)’s partner, GlaxoSmithKline plc (ADR) (NYSE:GSK), said that 72% of boys taking drisapersen experienced increased dystrophin levels after 25 weeks of treatment. That’s not bad — except rival Sarepta Therapeutics Inc (NASDAQ:SRPT) reported that 100% of patients in its phase 2 study of DMD drug eteplirsen showed increased dystrophin levels. Observers clearly saw Sarepta as the winner in the latest round of the DMD wars.
The end of the story still hasn’t been reached yet, though. GlaxoSmithKline plc (ADR) (NYSE:GSK) and Prosensa Holding NV (NASDAQ:RNA) have a larger phase 3 study under way for eteplirsen. Sarepta Therapeutics Inc (NASDAQ:SRPT) is hoping to gain approval based on its small phase study. There’s still a possibility that drisapersen makes it to market earlier than its rival.