by Adam Benjamin | October 9, 2013 1:48 pm
Wednesday has been a particularly bloody day in the world of biotech stocks. While the sector is usually prone to a lot of volatility, a number of headlines all crept up in just a couple days to knock down several biotechs at once.
Namely, three biotech companies have seen their stocks take a seat in the wake of bad news for their products. Here’s a look at what’s happening to drive each biotech stock down, and just how bad the damage is:
Idenix Pharmaceuticals (IDIX) is bleeding heavily today after getting stabbed in the back by partner Johnson & Johnson (JNJ). The two companies had partnered up for a hepatitis C treatment, but took a hit back in June when regulators started looking for more safety data regarding the treatment. IDIX dropped nearly 30% in one day, though it has spent the past four months climbing back up. However, yesterday, JNJ announced that it was buying the rights to a different compound for hepatitis C treatments from GlaxoSmithKline (GSK). IDIX stock is down nearly 25% since Tuesday (including 10% today), with analysts suggesting the company will need to find a new partner for its treatment.
Lexicon Pharmaceuticals (LXRX) is the victim of bad news today, announcing that its ulcerative colitis treatment isn’t showing enough promise to move forward with development. The company’s chief medical officer said that LXRX will instead focus on one of its other in-development treatments, abandoning the ulcerative colitis treatment. LXRX fell as much as 15% today before recovering to roughly 10% losses at time of writing.
But the real loser today has been Ariad Pharmaceuticals (ARIA). The company announced that one of its drugs, Iclusig, has more harmful side effects on the blood stream and heart than the company initially reported. As a result, the company had to stop clinical trials and advise users to lower dosages. ARIA shares are off 70% today in response.
Adam Benjamin is an Assistant Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.
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