Health Care Sector Update for 05/10/2018: VRX,VRX.TO,EGRX,ARMO,LLY,QHC

Top Health Care Stocks

JNJ +1.27%

PFE +0.45%

ABT +1.64%

MRK +0.07%

AMGN +0.59%

Health care stocks still were leading the U.S. markets higher Thursday, sharing the top of the leaderboard with utility stocks and displaying a more than 0.9% gain for the NYSE Health Care Index in recent trade. Also today, shares of health care companies in the S&P 500 were up more than 1.2% as a group while the Nasdaq Biotechnology index was drifting about 0.1% higher today.

Among health care stocks moving on news:

(-) Valeant Pharmaceuticals International (VRX,VRX.TO) has turned lower again shortly before Thursday's closing bell, erasing a 2% gain previously in the session that followed the Canadian drugmaker disclosing plans to revise its existing credit agreement by extending the current maturity date for its revolving credit facility by another five years and increasing its borrowing capacity by another $200 million over its existing $1 billion capacity and lowering the applicable interest rate. It also wants to borrow $3.815 billion through new Term B loans and using the proceeds to refinance its current Term B loans as well as redeeming its 5.375% senior notes due 2020 and its 6.375% senior notes due 2020 in addition to also redeeming its 6.75% senior notes due 2021 and its 7.25% senior notes due 2022. The company also plans to issue $750 million of new secured debt securities and $750 million of new unsecured debt securities.

In other sector news:

(+) ARMO Biosciences ( ARMO ) was staying within close range of its 67% advance on Thursday that followed the specialty drugmaker agreeing to a $1.6 billion buyout offer from Eli Lilly ( LLY ). Under the terms of the proposed transaction, Eli Lilly is planning to begin a tender offer for all ARMO Bio shares at $50 apiece, representing a 68% premium from Wednesday's closing price for the stock. The companies are expecting the deal will close during the current quarter ending June 30, subject to customary closing conditions.

(+) Eagle Pharmaceuticals ( EGRX ) was rising on Thursday, climbing over 6% despite the specialty drugmaker reporting adjusted Q1 net income and revenue lagging Wall Street expectations. Excluding one-time items, Eagle earned $0.53 per share during the three months ended March 31, down sharply from a $1.64 per share adjusted profit during the year-ago period and trailing the Capital IQ consensus by $0.16 per share. Revenue fell to $46.6 million from $76.8 million last year, also missing the $48.8 million analyst mean.

(-) Quorum Health Corp ( QHC ) plunged on Thursday, at one point losing almost one-third of its prior value, after late Wednesday reporting a much wider-than-expected Q1 net loss. Net loss attributable to the hospital and outpatient services company during the three months ended March 31 was $3.48 per share compared with a $0.99 per share loss during the same quarter last year and missing the Capital IQ consensus expecting a net loss of $0.55 per share by a wide margin. Net operating revenues fell to $486.8 million from $527.6 million during the year-ago period but exceeded the $467.8 million Street view. Quorum Health also is projecting FY18 revenue in a range of $1.925 billion to $1.975 billion, straddling the $1.94 billion analyst mean.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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