Double whammy
One decision led to a double whammy this week for biotech companies Halozyme Therapeutics, Inc. (NASDAQ:HALO) and Viropharma Inc (NASDAQ:VPHM). Viropharma’s shares fell 8% for the week after it canceled a phase 2 study that combined one of its products with one of Halozyme’s products. Halozyme Therapeutics, Inc. (NASDAQ:HALO), though, experienced the brunt of the news, with shares dropping over 16% for the week.
The clinical study found that some patients taking Viropharma Inc (NASDAQ:VPHM)’s Cinryze and Halozyme Therapeutics, Inc. (NASDAQ:HALO)’s recombinant human hyaluronidase, or rHuPH20, had unexpected incidence of non-neutralizing anti-rHuPH20 antibodies. Although these antibodies weren’t found to be associated with any adverse events, Viropharma Inc (NASDAQ:VPHM) decided to pull the plug on the study after talking with the U.S. Food and Drug Administration.
For its part, Halozyme Therapeutics, Inc. (NASDAQ:HALO) remains confident about the safety profile of rHuPH20. The enzyme is used in two already-approved products — Hylenex, which was approved by the FDA, and Baxter‘s HyQvia, which was approved in Europe.
Sudden stop
Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) shares fell nearly 16% for the week. The slide stemmed from a recommendation by an ethics committee to discontinue a clinical study for the company’s vosaroxin in treating acute mylogenous leukemia, or AML.
The decision from the ethics committee related to a study sponsored by Cardiff University. At this point, the only explanation given was that the monotherapy vosaroxin arm of the study “did not meet the pre-specified criteria for advancement.”
Although the Cardiff study discontinuation hangs as a cloud over Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) right now, the company is moving forward with its own phase VALOR study for vosarosin in treating AML. Sunesis expects to complete enrollment this quarter.
Not enough
Cadence Pharmaceuticals, Inc. (NASDAQ:CADX) reported that second-quarter revenue increased 126% year over year. That wasn’t good enough news, though. Shares fell almost 14% for the week.
The problem stemmed from the bottom line. Cadence Pharmaceuticals, Inc. (NASDAQ:CADX) announced a net loss of $11.9 million, or $0.14 per share. Analysts expected a loss of $0.11.
Although Cadence missed the consensus earnings estimate, the rest of the year looks pretty good as sales for its Ofirmev intravenous injection of acetaminophen continue to pick up steam. Cadence licensed Ofirmev from Bristol-Myers Squibb in 2006 to market the drug in the U.S. Bristol maintained the non-U.S. rights, and sells the drug under the brand name Perfalgan in Europe and the rest of the world outside of the U.S. market.
The company upped its full-year revenue guidance to $103 million-$105 million. Cadence previously gave 2013 guidance of $97 million-$103 million.
Most likely to improve
Each week, I attempt to identify which of the week’s worst-performing health-care stocks is most likely to rebound. This time around, though, I’ll have to waffle on that pick. I think that any of these three stocks could easily make a solid comeback.
Halozyme Therapeutics, Inc. (NASDAQ:HALO)’s rHuPH20 has been part of a lot of clinical trials without alarming safety issues. Unless there’s more to this story than we know right now, the stock should bounce back. Sunesis doesn’t have the track record with vosaroxin that Halozyme Therapeutics, Inc. (NASDAQ:HALO) has with rHuPH20, but worries stemming from the halted Cardiff University study could ultimately prove to present no issues for the company’s study.
Cadence’s earnings miss wasn’t good news, but Ofirmev’s growth trajectory is. I suspect the company can get back into the winner’s column in the coming quarters.
Granted, further issues could derail any or all of these stocks. For now, though, I pick all three as most likely to improve.
The article 3 Horrendous Health-Care Stocks This Week originally appeared on Fool.com and is written by Keith Speights.
Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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