Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is trending after the drug company disclosed in a recent 10-Q that it received a subpoena from the Department of Justice related to the way it marketed its medicines. The subpoena specifically requested more documents related to the company’s ‘Good Laboratory Practices in a bioanalytical laboratory’. Pharmaceutical investors have been on edge in recent months as many pharma and biotech stocks have cratered due to concerns of increased government regulation over pricing and other aspects of their operations. Although any sign of a potential government probe is bad news, investors don’t believe Vertex Pharmaceuticals’ issue is serious, as shares are down only modestly so far. Our data shows hedge funds are not overly bullish on Vertex. 45 funds in our database reported stakes in the company worth $1.14 billion, accounting for just 3.80% of its float at the end of June.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is trending after noted short-seller Andrew Left of Citron Research said in the Wall Street Journal that he doesn’t plan on publishing anything ‘earth-shattering’ on the company on Monday. Left previously published a scathing report on Valeant accusing the company of sending some business through a phantom specialty pharmacy to avoid auditor scrutiny. The report sent Valeant shares into a tailspin. Because of Left’s report and concerns over increased government regulation over drug prices, shares of the company are down by 34% year-to-date and by more than 60% since August.
Despite the poor performance, Bill Ackman of Pershing Square is still a fan, with a holding of 19.47 million shares at the end of June. Ackman thinks Valeant shares could be worth over $400 per share in three years and said that if he had more capital, he would buy even more shares than he already owns.