March 23, 2017
By Mark Terry, BioSpace.com Breaking News Staffaff
Yesterday, Keith Speights, writing for The Motley Fool, looked at five life science stocks that billionaire investors were investing in. The premise was that if they’re doing it successfully, maybe the average investors should follow suit.
Today, Speights, investigates some life science stocks billionaire investors have thrown their money into that have turned out to be pretty bad investments. Here are three of those biopharmas:
Based in Malvern, Penn., Endo focuses on generic and specialty branded drugs. It’s had its problems recently. On March 14, the U.S. Food and Drug Administration (FDA)’s Drug Safety Risk Management and Anesthetic and Analgesic Drug Products Advisory Committee voted 18 to 8, with one person abstaining, that the company’s reformulated OPANA ER no longer outweighed the risks. Opana ER is an opioid agonist for severe pain.
Company shares are down about 40 percent since the beginning of the year. Two big investors who own or owned a significant stake in the company include Bridgewater Associates’ Ray Dalio and Renaissance Technologies’ James Simons.
Speights writes, “What happens next will be critical for Endo. It’s possible that the FDA will require Opana ER to be withdrawn from the market. However, the agency could also decide to allow the drug to remain on the market but with additional restrictions to mitigate risks.”
Endo are currently trading for $10.
Headquartered in Waltham, Mass., AMAG focuses on maternal health, anemia management and cancer supportive care. At its full-year and fourth-quarter financial report on February 14, the company reported $532.1 million in revenues, up from $418.3 million in 2015.
Company shares are down about 35 percent this year. Speights writes, “AMAG’s problems started in January when the company announced its fourth-quarter financial results and expectations for 2017. AMAG’s outlook for this year wasn’t as good as Wall Street analysts hoped. Zacks and Raymond James downgraded the stock.”
Then in February, AMAG provided top-line results from a clinical trial of Makena, a hormone to cut the risk of premature birth, which had mixed results. Guggenheim lowered its price target and the stock took a hit again.
AMAG are currently trading for $21.65.
MannKind Corporation is in trouble. In 2014, it received approval for an inhaled form of insulin, Afrezza. Because most diabetics use injections or insulin pumps, Afrezza seemed like it would blow away the market. It signed a big sales and marketing deal with Paris-based Sanofi (SNY) and everybody waited. And waited.
By January 2016, Afrezza had failed to gain traction and Sanofi fled the partnership. The failure was caused by insurers, who classified the drug in Tier 3, instead of the preferable Tier 2. It meant that for consumers to get the drug, they would pay a higher co-pay, and there were potentially other restrictions.
The company has tried a couple different strategies, but none seem to be working, and there is some speculation the company may not have enough money to stay in business.
MannKind are currently trading for $2.02.
Speights notes that, “Any of these healthcare stocks could rebound. My hunch is that AMAG might be the most likely to still pay off…. Despite the recent disappointments, the biotech should still see success over the long run with Makena and its other products.”
