Stocks started Monday’s action firmly in the black, but in the absence of any bullish catalyst or hook, the euphoria faded pretty quickly. A disappointing durable orders report for May took the wind out of the market’s sails. When all was said and done, the S&P 500 fell back from its high to a close of 2,439.07, up only 0.03% from Friday’s last trade.
It could have been worse though — you could have owned Stratasys, Ltd. (NASDAQ:SSYS), Arconic Inc (NYSE:ARNC) and Seattle Genetics, Inc. (NASDAQ:SGEN). These three names dished out the most pain to the most shareholders today, albeit for understandable reasons.
Here’s the deal.
Seattle Genetics, Inc. (SGEN)
Seattle Genetics shareholders got the new trading week started on the wrong foot, with SGEN sliding 8.4% following reports that one of its cancer drug trials didn’t quite live up to expectations.
The drug, called Adcetris, was being co-developed by Japanese biopharma outfit Takeda Pharmaceutical Co Ltd (ADR) (OTCMKTS:TKPYY) as a therapy for certain forms of blood cancer. While SGEN investors had seen good reason for hope as the organization began phase-three testing, the outcome of the larger trial wasn’t as strong as first expected. The progression-free survival rate of 82.1% was only about five basis points better than the placebo-comparison.
J.P. Morgan analyst Cory Kasimov tried to ease some of the pain SGEN shareholders were feeling today, saying:
“While these results don’t necessarily have the “wow factor” and statistical details (confidence intervals) will be important to see (may have to wait for ASH in Dec), our recent KOL conversations lead us to believe that the data will be enough to drive significant uptake in this setting (strong desire to eliminate the use of bleomycin in these patients that are typically younger). The outstanding question at this point remains valuation; and with the unfortunate timing of the announcement to discontinue the SGN-CD33A Phase 3 CASCADE trial in AML last week, we would not be surprised if the reaction to this event remains somewhat muted.”
The market struggled to see a silver lining though.
Arconic Inc (ARNC)
Materials company Arconic — previously known as Alcoa — saw its stock take a tumble today after news broke that its materials may have been a contributing factor in the spread of a fire that destroyed an apartment tower in London last week.
The burned building, which claimed at least 79 lives, was covered in Reynobond, which is a plate consisting of polyethylene sandwiched between two aluminum sheets. According to sources, the material wasn’t properly sold disclosing it was a flammable material, which would have disqualified its use in the government-sponsored construction of the high-rise.
Although the threat of legal action has only been rumored at this point in time, Arconic has stopped selling Reynobond effective immediately.
ARNC ended the day down 6%.
Stratasys, Ltd. (SSYS)
Finally, shares of 3D printer manufacturer Stratasys lost 11.7% of their value on Monday after Goldman Sachs downgraded SSYS from “Neutral” to “Sell,” simultaneously sharing a less-than-flattering target price on the stock.
While the 3D printing market is growing at a healthy clip and Stratasys is capturing its fair share of that business, the company remains unprofitable. Goldman Sachs analyst Matthew Cabral thinks the headwind is only going to grow for SSYS, noting this morning that the company doesn’t offer any metal-printing solutions whereas its competition does.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.