Why These Stocks Are Leading Today’s Losers

Investors are driving Horizon Pharma PLC (NASDAQ:HZNP) lower today, after news emerged that the biopharmaceutical company is being sued by Express Scripts Holding Company (NASDAQ:ESRX) for some $140 million. The largest manager of prescription drug plans in the United States, Express Scripts has removed mail-order pharmacy Linden Care from its network, after it failed to fulfill contractual obligations and distributed mainly medications from Horizon. The latter denied any wrongdoing and has hit back at Express Scripts accusing the company of a conflict of interest, since it operates one of the largest mail-order pharmacies in the U.S. Shares of Horizon have plummeted during the first hours of trading today and are currently down by more than 15%.

With 12.2 million shares of Horizon Pharma PLC (NASDAQ:HZNP), James E. Flynn and Deerfield Management had the largest holding among the funds we track at the end of the second quarter. Kevin Kotler is also invested, but chose to reduce exposure to the company, dumping nearly a third of his stake and leaving his fund, Broadfin Capital, with 4.81 million shares. In general, Horizon Pharma is not very popular among the funds we follow, as just 6% of the funds held this stock at the end of June and had control over 34% of outstanding shares.

Shares of Oracle Corporation (NYSE:ORCL) are slightly lower this morning after the stock was downgraded by analysts at Morgan Stanley. In a note to investors, Morgan Stanley assigned an ‘Equal Weight’ rating, down from ‘Overweight’, but has maintained its price target of $45 per share. The firm said Oracle failed to generate revenue growth from its cloud bookings business and is unsure about the impact Oracle’s migration to the cloud would have on its bottom line in the near future.

The software giant is among the hedge funds’ top stock picks for the second quarter, although the 58 funds invested in the company held just 4.5% of common stock. During the second quarter, Boykin Curry reduced his investment in Oracle Corporation (NYSE:ORCL) by 6% to some 42.2 million shares, while Robert Rodriguez and Steven Romick did the opposite. Their fund, First Pacific Advisors, reported a 7% increase to 20.2 million shares in its latest 13F filing.

Disclosure: none.