The government has spooked the biotechs and drug makers; however, the market is mixed with companies such as JAZZ are up and ACT down. This is nothing to worry and would subside soon.
C H E E R $ !
Biotechs, Medicals Get Hurt Amid Price-Inquiry News
By NANCY GONDO, FOR INVESTOR'S BUSINESS DAILY
Posted 03/21/2014 06:26 PM ET
Two normally healthy biotech stocks suffered critical declines Friday, while most other medical names on the IBD 50 remained in fairly stable condition.
Still, the biotech illness spread to other drug stocks. As a result, six of the seven biggest losers hailed from the medical sector, including generics and ethical drug makers.
Alexion Pharmaceuticals (ALXN), No. 5 on last week's list, fell 13.87, or 8%, to 159.79 in heavy trade as it closed below its 10-week moving average for the first time since late October. The Connecticut-based biotech's sole marketed drug, Soliris, used to treat a rare disease called atypical hemolytic uremic syndrome, sells for upward of $400,000 a year.
While there was no specific Alexion-related news, its sell-off may have stemmed from a letter several House Democrats sent to Gilead Sciences (GILD) asking the biotech to explain why its Sovaldi hepatitis C drug costs $84,000. As a result, some states' Medicaid programs are funding Sovaldi only for the sickest patients, the letter said.
Biogen Idec (BIIB) gave up 28.51, or 8%, to 318.53 in fast turnover. The stock is 11% off its recent high, but remains 7% above a 298.92 buy point from a flat base it cleared in January. The move marks its second pullback to its 10-week line.
The Cambridge, Mass.-based biotech's portfolio of drugs includes Avonex, Tecfidera and Tysabri for multiple sclerosis.
Biotechs have outperformed recently, ranking No. 1 or No. 2 the past six weeks among the 197 industry groups tracked by IBD.
Anika Therapeutics (ANIK) held up despite the biotech downdraft. It ended down 54 cents at 42.61 in below-average volume and managed a small weekly gain. Shares are extended more than 50% past a 27.90 buy point from a cup base they broke out of in October.
The stock spiked 33% Feb. 26 after the Bedford, Mass.-based company said it won FDA approval for its Monovisc osteoarthritis treatment, for which it will receive royalties and milestone payments from a Johnson & Johnson (JNJ) unit.
Generic-drug maker Actavis (ACT) shed 6.35, or 3%, to 209.37. The stock is still 26% above a 166.42 three-weeks-tight buy point, so investors should consider taking at least partial profits if they haven't already done so.
A few ethical drug makers got hit too. Jazz Pharmaceuticals (JAZZ) fell 6.40 to 143.86, Salix Pharmaceuticals (SLXP) 4.40 to 110.24 and Valeant Pharmaceuticals (VRX) 4.85 to 135.55.
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