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Contributors: Douglas McIntyre Jon C. Ogg

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Thursday, October 26, 2006

Most Drug Stocks Reacting Poorly to Results Today


Renovis (RNVS) is demonstrating just how fun it can be when you are essentially a one-trick pony in a development pact with a Big Pharma company in phase III studies that fails to produce results. Its phase III study with AstraZeneca (AZN) to treat strokes failed to meet endpoints and is being terminated. RNVS shares are down a whopping 73% to what some feel is under the cash value of the company, but it will stilll have excessive burn rates; and AZN shares are down 7.7% to $61.25.

Bristol-Myers Squibb (BMY) is in a rough spot with its shares off another 1.3% at $24.35. They beat earnings estimates at $0.22 EPS vs. $0.20 estimates, but generic Plavix chewed their profits down 65% from last year and the company is still essentially leaderless.

Arena (ARNA) failed to impress the street, but it looks like a "Sell the news" or profittaking reaction more than anything. The stock is up huge since Cramer has been touting it and there is still a pending securities shelf that the company has not taken advantage of yet, and the company is still just a development stage company. ARNA is down 4.7% to $15.53.

GlaxoSmithkline ADR's (GSK) are trading down 2.8% at $54.54. It actually beat earnings and raised guidance, but it is lower after delaying its cervical cancer drug. It even announced an $11 Billion equivalent share buyback plan.

Merck (MRK) was initially up after GSK's delay in a competitor to Merck's Gardisil for cervical cancer vaccine, but even its shares are down 0.3% at $45.95.

Celgene (CELG) reporting $0.15 EPS vs. $0.14 estimates and revenues also came in ahead at $244.8 million vs. $230 million estimates; and it is one of the few drug-biotech names up with is shares up an impressive 9.5% to $48.30.

Jon C. Ogg
October 26, 2006

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