It’s been a wet week for much of the U.S. Shareholders of several health care stocks probably feel like they have been soaked this week regardless of the weather where they live. Here are three horrendous health-care stocks for the past five days that have dampened the spirits of investors.
When it rains, it pours
You know what they say: “When it rains, it pours.” Internet health insurance broker eHealth, Inc. (NASDAQ:EHTH) experienced the displeasure of experiencing that old adage firsthand over the last couple of weeks. The company made our list of horrendous health-care stocks last week after shares fell 21% on disappointing earnings results and guidance. Now, it has the dubious distinction of making a repeat appearance.
Shares dropped another 15% this week. Some of this decline probably stems from continued repercussions from the poor earnings and lower-than-expected guidance. The other culprit, though, was an announcement by the Centers of Medicare and Medicaid Services, or CMS, about plans to cut Medicare Advantage reimbursement rates. That news hit many insurers in the Medicare Advantage market, particularly Humana Inc. (NYSE:HUM), which saw shares fall by as much as 8% before rebounding somewhat.
eHealth felt the pain more than others. That’s probably because the company already will be in a difficult position as it tries to compete amid new state health insurance exchanges. Medicare cuts could make a bad situation even worse.
More pouring, more raining
Oncolytics Biotech, Inc. (USA) (NASDAQ:ONCY) is another company that opted to open the floodgates for more share this week. Shares fell 10% on the news.
The small biotech announced plans to move forward with a secondary offering of 8 million shares at $4 per share. This represents more than 10% of the current number of outstanding shares.
It’s been a wild ride for Oncolytics shareholders over the past year. The stock fell more than 65% in 2012, but then the company announced encouraging results from a phase 3 study of Reolysin, its proprietary form of reovirus. This study showed significant improvement in tumor growth or shrinkage in patients with head and neck cancer who took Reolysin. Since that announcement, shares more than doubled — at least until this week.
When it pours, it rains
Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) shares fell over 9% for the week. That’s despite beating expectations with a net loss of only $0.14 per share compared to the $0.20 loss expected by analysts. Achillion’s shares sank, though, because the company announced on the same day of the earnings release that it was pouring $125 million worth of new shares into the market with a secondary public offering.