Feeling good on the first day back from a major holiday weekend, and perhaps inspired by the strongest consumer confidence we’ve seen since 2001, the market managed to get the new week started on a bullish foot. The S&P 500 ended the day at 2,268.88, up 0.22%.
Not every stock was in step with the marketwide advance, however. Amphastar Pharmaceuticals Inc (NASDAQ:AMPH), Endologix, Inc. (NASDAQ:ELGX) and Seattle Genetics, Inc. (NASDAQ:SGEN) were each doomed from the start today on the heels of bad news.
Seattle Genetics, Inc. (SGEN)
Santa Claus wasn’t kind to owners of drug maker Seattle Genetics the first day back following Monday’s Christmas break. On Tuesday morning, the company announced one of its ballyhooed leukemia-drug development trials was being halted after its true dangers were discovered, sending SGEN into a tailspin.
The drug in question is SGN-CD33A, or vadastuximab talirine, which is a treatment for acute myeloid leukemia. Although the drug showed measurably efficacy, the Food and Drug Administration has halted the early-stage trial on the heels of four deaths of patients involved in the trial.
All four of the more than 300 patients involved the trial experienced blocked blood flow in the liver. SGN-CD33A has not been specifically identified as the cause of the liver problems and deaths, though it’s likely to be the culprit. The FDA’s halt is an indefinite one.
SGEN ended the day down 15.4%.
Endologix, Inc. (ELGX)
SGEN wasn’t the only healthcare name to take one on the chin today. Endologix was hit even harder, with ELGX tumbling 26.7%.
Endologix makes medical devices for the treatment of aortic disorders. The device called the AFX Endovascular AAA System though — the product line expected to drive 63% of the company’s 2016 revenue — has stopped being shipped for the time being due to a potential manufacturing flaw in some versions of the device.
Endologix doesn’t expect the halt to be a long-lived one, but the announcement does ding the company’s credibility.
Amphastar Pharmaceuticals Inc (AMPH)
Finally, Amphastar Pharmaceuticals made the daily “Worst 3” list a healthcare trifecta, with AMPH losing 9.1% of its value on Tuesday after receiving a concerning complete response letter from the FDA regarding its Primatene Mist, which is an epinephrine inhalation aerosol.
The complete response letter is not an outright rejection of the drug by the FDA. Indeed, a CLR is usually a specific roadmap a company can follow to ensure the revised request for the FDA’s approval has better odds of success. Still, the FDA’s failure to give the drug a green light on the first go-around doesn’t bode especially well.
Amphastar CEO Dr. Jack Zhang commented:
“While we are disappointed to have not received approval at this time, we intend to continue to work with the FDA during the post-action phase to address their concerns in the CRL by the middle of 2017 and bring Primatene Mist back to the OTC market as soon as possible.”
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.