Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
These Companies Lost the Most in a Down Year for Biopharma Stocks
Bad news sells when it comes to the news. And when the news is bad for a public biopharma company, it is the investors that sell. That proved truer than ever in 2016, a year marked mostly by Wall Street’s retreat from Biotech and Pharma stocks. The result was more losers than winners, as in biopharmas whose stock prices finished the year at a price lower than in 2015.
Indeed, last year’s losers wound up falling further than the losers that made GEN’s Wall Street Losers of 2015. This can be seen in the 10th-ranked companies of the last three years: The company at the bottom of the 2016 List lost 85.4% of its share price during the year, compared with 81.9% for the number-10 company on the 2015 list, and 57.2% for the number-10 company on the 2014 list.
The following is a list of 2016’s top 10 worst stock performers—the 10 biotech, pharma, tools/tech, and services company stocks whose prices fell the most during the past year. Companies are listed by name; their stock exchange and trading symbol; the closing price on December 30, 2016—the last trading day of last year—and December 30, 2015; the percentage of change between the closing prices; and an explanation for the companies’ share slump this past year.
As is customary, most of the companies that lost on Wall Street during 2016 were up-and-comers, featuring small-cap to mid-cap stocks. Their share prices typically plunged in value as a result of some sort of bad news. Most often, that bad news was the failure of clinical trials or entire clinical programs, followed in some cases by layoffs, management changes, and even takeovers of the affected companies. That’s because smaller companies have fewer programs, so a failure is bound to have a greater impact than on a Biopharma giant with a larger pipeline.
Another significant factor in plunging stock prices this past year was unfavorable regulatory actions, such as FDA Complete Response Letters blocking approval of new drug applications.
Not included on this list are companies that carried out stock splits, since the resulting adjusted closing prices did not allow for an apples-to-apples comparison of year-to-year losses for investors.
One such company which otherwise would have made this year’s list, Orexigen Therapeutics, carried out a 1-for-10 reverse stock split effective July 12, with its board reasoning “that an increased stock price may encourage investor interest and improve the marketability of our common stock to a broader range of investors, and thus enhance liquidity,” according to a May 25 regulatory filing.
#10. Dipexium Pharmaceuticals
Dec. 30, 2016: $1.60
Dec. 30, 2015: $10.94
% Change: (85.4%)
Shares cratered 78%, closing at $2.80 on October 25 from $12.75 the previous day, after the company disclosed topline results showing that its diabetic foot ulcer candidate Locilex® (pexiganan cream 0.8%) failed two Phase III trials. Shares kept skidding for the rest of 2016, hitting their nadir of $1.25 on December 14 and 15. A week later on December 23, Dipexium and PLx Pharma agreed to an all-stock merger. Before the Locilex double-whammy, shares yo-yoed, falling nearly 44% from December 30, 2015 to February 17 when they closed at $6.15, before more than doubling to $12.98 on April 29, then yo-yoed again before peaking at $16.50 on September 27.
#9. Anthera Pharmaceuticals
Dec. 30, 2016: $0.65
Dec. 30, 2015: $4.69
% Change: (86.1%)
A pair of trial failures late in 2016 kept shares down after fluctuating most of the year, unlike its 2015 Wall Street Winner status. Shares peaked at $4.66 on March 9, then yo-yoed around the $3–$4 range until the fall. The company said November 10 that its systemic lupus erythematosus candidate Blisibimod missed the primary endpoint in the Phase III CHABLIS-SC1 trial. Investors sent shares down almost 32%, to $1.90 from $2.78 the previous day. The following month, Sollpura™ (liprotamase) failed a Phase III clinical trial in cystic fibrosis patients with exocrine pancreatic insufficiency. The stock fell another 68%, from $2.01 on December 27 to $0.65 three days later.
Dec. 30, 2016: $0.37
Dec. 30, 2015: $2.69
% Change: (86.2%)
Shares toppled nearly 60%, from $2.51 to $1.01, on July 12, the day after the company acknowledged that its lead product candidate aldoxorubicin missed its primary endpoint in a Phase III trial comparing the cancer treatment candidate to investigator’s choice of therapy in patients with relapsed or refractory soft tissue sarcomas (STS). Previously in 2016, shares fluctuated before peaking for the year at $3.49 on April 25, the day CytRx saw two members of its clinical development team honored for managing the trial with gold awards at the PharmaTimes Clinical Researcher of the Year-The Americas competition. Shares reached their lowest point of 2016 on December 30, closing at $0.37.
#7. Fibrocell Science
Dec. 30, 2016: $0.63
Dec. 30, 2015: $4.67
% Change: (86.5%)
The stock’s fortunes rose and mostly fell in 2016 with lead product candidate azficel-T. After slumping to $2.12 on February 10 and 11, shares rebounded to $3.32 on April 22, the day after the company said it completed its last patient visit for primary endpoint analysis in the Phase II clinical trial of azficel-T for vocal cord scarring resulting in chronic or severe dysphonia. The trial failed, Fibrocell acknowledged on June 8, sending shares slumping nearly 37% to $1.26, from $1.99 the previous day. On June 29, with shares closing at $1.13, Fibrocell said it was ending development of azficel-T and eliminating 50% of its workforce; the news did little to lift shares.
#6. Marinus Pharmaceuticals
Dec. 30, 2016: $1.01
Dec. 30, 2015: $7.76
% Change: (87.0%)
Shares in 2016 didn’t recover from the failure of the company’s lead product candidate ganaxolone. On June 13, the company conceded that ganaxolone failed a Phase III trial assessing the CNS-selective GABAA modulator in adults with drug-resistant focal onset seizures. Marinus said it would end the development program in that indication while focusing instead on status epilepticus and pediatric orphan indications. Shares plunged that day almost 70%, to $1.62 from $5.34 the previous trading day June 10 and $6.04 on June 7. Later in the year, the company disclosed clinical successes for ganaxolone in Fragile X Syndrome, PCDH19 pediatric epilepsy, and status epilepticus, but the announcements didn’t cause the share price to bounce back to first-half levels.
#5. Tokai Pharmaceuticals
Dec. 30, 2016: $0.98
Dec. 30, 2015: $8.74
% Change: (88.8%)
The company’s shares tanked 79% from $5.20 to $1.10 on July 26, the day Tokai said its lead candidate galaterone failed the Phase III ARMOR3-SV trial comparing it to Xtandi® (enzalutamide) in treatment-naïve metastatic castration-resistant prostate cancer (mCRPC) patients whose prostate tumors express androgen receptor splice variant-7 mRNA (AR-V7). Three days later, the company announced plans to eliminate 60% of its workforce. And on December 22, Otic Pharma said it will become Tokai’s majority owner, sending Tokai shares 20% higher, to $1.21. Tokai rang in 2016 with a 41% stock slump, to $5.12 on March 28, before dosing the first patients in the ARMOR2 Phase II trial of galeterone in mCRPC patients whose disease progressed during Xtandi treatment, then saw shares rebound almost 61%, to $8.22 on April 7. When Tokai ended enrollment in that trial on August 23, shares fell 16%, to $1.14.
Dec. 30, 2016: $1.95
Dec. 30, 2015: $19.35
% Change: (89.9%)
The company’s share price fell from double digits and stayed down after the FDA on April 15 issued a Complete Response Letter precluding approval of Chiasma’s Mycapssa™ (octreotide) capsules for the maintenance treatment of adult patients with acromegaly, saying another clinical trial would be needed. Shares plummeted 63% the following trading day April 18, from $10.17 to $3.75, sparking a slide that saw company shares fall through the $3 range, to the $2 range. On June 14, Chiasma said it would eliminate approximately 33% of its workforce; shares fell 8% to $2.57 from $2.80 the previous day. Before the CRL, shares climbed nearly 58%, from $8.06 on March 28 to $12.72 on April 8, after slumping in January and fluctuating in February and March.
Dec. 30, 2016: $2.80
Dec. 30, 2015: $31.57
% Change: (91.1%)
Shares were rocked in 2016 by a pair of FDA events. On November 2, the agency released a preliminary review that highlighted solithromycin’s “significant safety signal for hepatotoxicity” in advance of an advisory committee meeting. Shares fell almost 61% to $7.30 from $18.65 the previous day, and continued dipping after the Antimicrobial Drugs Advisory Committee on November 4 voted 7-6 that efficacy results of solithromycin outweighed the risks for the treatment of community-acquired bacterial pneumonia (CABP). Cempra was forced to ring out 2016 on December 29 with a Complete Response Letter precluding approval of oral and intravenous solithromycin for CABP in adults, pending additional clinical safety information and resolution of manufacturing facility inspection deficiencies. Shares plunged 57%, to $2.60 from $6.10 a day earlier.
Dec. 30, 2016: $4.83
Dec. 30, 2015: $78.10
% Change: (93.8%)
The proverbial bottom fell out of the company’s stock on December 12 following acknowledgement of not one but two clinical trial failures for its Fovista® (pegpleranib), which flunked two Phase III trials assessing the macular degeneration candidate in combination with the Roche (Genentech)/Novartis marketed drug Lucentis® compared to Lucentis alone. Shares cratered 86%, falling to $5.29 from $38.77 the previous trading day. Ophthotech responded by eliminating approximately 80% of its workforce. Yet the stock was heading down even before the Fovista failures were announced; shares fell 48% from $59.39 on September 27 to $30.85 on November 3 before climbing back on anticipation of favorable trial results.
#1. Concordia International
NASDAQ: CXRX; TSX: CXR
Dec. 30, 2016: $2.12
Dec. 30, 2015: $40.75
% Change: (94.8%)
The company’s stock hovered in the $20 range from February through July, with a 25% one-day jump to $30.50 on April 21, when Concordia launched a strategic review. Shares plunged August 12 when the company suspended its quarterly dividend and lowered its financial outlook, following second-quarter results that missed analyst expectations. Shares dropped 38% to $10.13 from $16.36 the previous day, then continued plunging 82% through the fall, hitting a 2016 low of $1.83 on November 8. A day earlier, the company reported a 19.9% year-over-year revenue drop, citing in part pressures from competing products, and suspended issuing financial guidance due to a change in leadership; CEO Mark L. Thompson said October 21 he was stepping down.