The so-called “Trump trade” failed to follow through for the third trading day in a row, calling into question the market’s true intentions here following the knee-jerk bullish response to Donald Trump’s successful bid for the Presidency. By the time the closing bell rang, the S&P 500 was at 2,164.20, down a mere quarter of a point from Friday’s last trade.
It could have been worse, though, and for owners of Puma Biotechnology Inc (NYSE:PBYI), Dynavax Technologies Corporation (NASDAQ:DVAX) and Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR), it was worse.
These three names ended the session deep in the red, although for understandable reasons.
Petroleo Brasileiro SA Petrobras (ADR) (PBR)
Take your pick of reasons Brazilian oil company Petroleo Brasileiro SA Petrobras — you know it better as just Petrobras — sold off in a big way today. There was more than one.
The biggest unspoken reason PBR ended the day down 1.6% today was another meteoric rise of the U.S. dollar. The U.S. Dollar Index advanced another 0.95% (a huge move for currency) on Monday in step with another surge in U.S. interest rates. In that crude oil prices are priced in U.S. dollars, even for foreign oil companies, a rising dollar works against oil company profitability.
Fanning the bearish flames that burned PBR on Monday was a lackluster third-quarter earnings report. Although that bad news came out before Friday’s open and took a toll then, the bears weren’t done yet. The oil giant booked a $5.05 billion loss. Much of that was a one-time loss, but not enough of it was to let PBR remain unscathed on Monday.
Dynavax Technologies Corporation (DVAX)
If you thought the 1.6% hit PBR took on Monday was rough, that’s nothing to the sucker-punch that shareholders of Dynavax Technologies suffered today. DVAX plunged 65% after the Food and Drug Administration rejected its ballyhooed hepatitis B vaccine Heplisav-B.
Dynavax Technologies still feel Heplisav-B has a future. CEO Eddie Gray commented:
“The CRL is consistent with our opinion that Heplisav-B is approvable and we are seeking to meet with the FDA as soon as possible. However, the time and resources that will be required to gain approval leads us to consider that we may not be able to advance this program on our own and we are moving swiftly to identify a potential pharmaceutical or financial partner.”
The market, however, clearly isn’t as optimistic, sending DVAX shares to its lowest levels since 2008.
Puma Biotechnology Inc (PBYI)
Last but not least, DVAX wasn’t the only biopharma name to be up-ended by bad news regarding one of its drugs on Friday. Puma Biotechnology was also whacked in response to reports that its breast cancer drug neratinib.
Like Heplisav-B, neratinib is not yet on the market. It’s currently being reviewed by the FDA. Although there has been no word yet from the FDA, Puma in the meantime disclosed that it will need to add a second anti-diarrhea agent to the therapy. That addition may well make it even more difficult to approve the drug.
The 20.4% tumble PBYI took today, however, may have more to do with the fact that some attorneys are already planning class-action lawsuits, which will claim the company failed to adequately disclose all the potential risks to neratinib’s approval.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.