3 Horrendous Health-Care Stocks This Week
Feb 15th 2013 8:37PM
Updated Feb 16th 2013 9:00AM
The Ides of March meant bad news for Julius Caesar. Similarly, the week surrounding the Ides of February haven't turned out so well for several health-care stocks. Here are three that experienced tragic falls.
The week started off pretty good for Amicus Therapeutics . That changed on Friday. Shares plummeted, closing down 22% for the week.
What happened? Amicus announced additional six-month results from a phase 3 trial of migalastat HCl in treating patients with Fabry disease. The numbers for migalastat HCl just weren't good enough. Only 13 of 32 patients taking the drug met the primary endpoint of the study, a statistically insignificant improvement over the nine patients in the placebo group who also met the primary endpoint.
Amicus CEO John Crowley reiterated the company's commitment to moving forward with the next stage of the study. Those results are expected in the second quarter. Amicus is also moving forward with another phase 3 study comparing the effects of migalastat HCL against enzyme replacement therapy, or ERT, in the treatment of Fabry disease.
Web-based health insurance broker eHealth's shares plunged more than 21% this week. The drop came after the company reported disappointing quarterly results and 2013 guidance.
Adjusted earnings of $0.18 per share missed analyst expectations of $0.21 per share. Reported revenue of $45.3 million also missed the $46.8 million projected by analysts. eHealth attributed the lower numbers primarily to its switching to a direct marketing approach for its Medicare business. The company has used a referral-based model in the past.
eHealth gave guidance of $0.61 to $0.71 per share for full-year 2013. That range also fell below the $0.76-per-share level that analysts had previously estimated. The lower guidance likely reflects challenges for the company in adapting to a new competitive environment as many states set up their own health insurance exchanges included in Obamacare.
Bad news comes in threes
Drug and medical device maker Hospira had three bad breaks over the past few days. Shares fell nearly 16% for the week on the triple whammy.
First, Hospira announced revenue and earnings guidance for 2013 that failed to impress Wall Street. The company projects earnings of $2.05 to $2.20 per share and revenue of $4.13 billion to $4.21 billion this year. Average analyst expectations were for earnings of $2.31 per share on $4.23 billion in revenue.
Second, the U.S. Food and Drug Administration expanded a ban of infusion pumps made in Puerto Rico. The FDA halted imports of Hospira's Symbiq infusion pumps last November. On Wednesday, the agency extended the ban to other models made in Puerto Rico.
That piece of bad news led Hospira to retract its earlier poorly received guidance for the year -- strike three. The company had assumed sales of the other infusion pumps in its projections. Earnings could take a hit by $0.20 per share because of the FDA's decision. The good news for Hospira is that there isn't an old saying that bad news comes in fours.
Et tu, Brute
With the beatings each of these stocks had this week, I feel a little bad about piling on by picking the worst of the bunch. But I will do so, anyway.
My view is that Amicus faces the toughest challenge after its disappointing phase 3 results for migalastat HCl. Maybe the company can pull a rabbit out of a hat with the rest of the phase 3 study. I wouldn't put money on that, though. Shakespeare wrote in his play "Julius Caesar" that "men at some times are masters of their fates." Unfortunately, in the world of biotech those times don't come often enough.
Friends, Romans, countrymen... lend your ears to The Motley Fool's chief investment officer. Why? Because he has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.
The article 3 Horrendous Health-Care Stocks This Week originally appeared on Fool.com.Fool contributor Keith Speights has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.