After having a weekend to think about it, investors decided the prospect and potential impact of rising interest rates may not be as great as presumed following Janet Yellen’s comments late last week. The S&P 500 ended the day at 2180.38, up 0.52%.
Not every stock got back in a bullish groove on Monday, however. Core-Mark Holding Company, Inc. (NASDAQ:CORE), Gilead Sciences, Inc. (NASDAQ:GILD) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) each lost ground today, but for understandable reasons.
Here’s the deal.
Gilead Sciences, Inc. (GILD)
Not that biopharma stock Gilead Sciences was doing well otherwise, but another dose of bad news pulled it lower again today.
The prod for the pullback from GILD was two-fold. One of the prods was supplied by Citigroup, which said sales of the company’s hepatitis C drugs were apt to roll in below expectations for the quarter currently underway. The bank’s analysts specified “We estimate VA sales in 2Q’16 at ~$400M and believe they could be same for 3Q’16 given fixed budget. This gives us 3Q’16 IMS projected demand of $1.7-$1.8B.” Non-VA revenue could come up short of forecasts by as much as 19%. Although that news was posted on Friday, many investors didn’t process it until today.
Fanning the bearish flames on Monday was news from GlaxoSmithKline plc (ADR) (NYSE:GSK) that it intended to improve the treatment of HIV by reducing the number of pills typically needed by most from three to two, thus creating fewer side effects. One of those two pills would be Glaxo’s dolutegravir, taking aim at Gilead’s bread and butter business.
All told, GILD finished the day down 2%.
Valeant Pharmaceuticals Intl Inc (VRX)
GILD wasn’t the only name in the biopharma space to miss out on the market’s rally today. Perpetual whipping boy Valeant Pharmaceuticals also lost ground, giving up almost 2% of its value as well.
The selloff was sparked a group of consumers that used the company’s drugs, claiming they were overcharged by its now-defunct specialty pharmacy partner Philidor. The charges, submitted to a Manhattan U.S. District Court, allege that VRX violated federal racketeering and corruption laws, which not only allow for compensation, but also penalties.
Core-Mark Holding Company, Inc. (CORE)
Last but not least, food and tobacco wholesaler and distributor Core-Mark Holding Company and convenience and gas store chain Circle K are parting ways … at least in the southeast part of the nation. The supply agreement for 1,100 stores — 36% of the stores in the network — doesn’t look like it will be renewed when it expires in January of the coming year.
Core-Mark CEO Thomas B. Perkins said of the decision, “We are disappointed that we did not retain all of the stores during this renewal process, but our long-standing partnership with this industry leading retailer remains strong.”
That’s not enough to satisfy CORE shareholders, however, who sent the stock down to the tune of 14% on Monday.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.