Markets

Health Care Sector Update for 11/08/2016: DEPO,OSIR,BIOS

Top Health Care Stocks

JNJ +0.57%

PFE +0.40%

MRK +0.10%

ABT +0.92%

AMGN -0.25%

Health care stocks were posting big gains for a third day in a row, with the NYSE Health Care Index rising slightly over 0.4% while shares of health care companies in the S&P 500 were up more than 0.5% as a group.

In company news, Depomed ( DEPO ) slumped on Tuesday after the specialty drugmaker late yesterday reported Q3 financial results trailing Wall Street expectations and cut its FY16 forecast, prompting at least one analyst downgrade today.

Excluding one-time items, the company earned $0.28 per share, down from a $0.33-per-share adjusted profit during the year-ago period and lagging the $0.35 Capital IQ consensus. Total revenue increased 5% over the same quarter last year to $110.5 million, missing the $126.4 million Street view.

The company also reduced its FY16 outlook, cutting its projected revenue for the 12 months ending Dec. 31 to $455 million to $465 million from a prior range of $480 million to $505 million and below the $486 million consensus call. It also sees non-GAAP adjusted per-share earnings of $79 million to $85 million, compared with its prior guidance expecting $95 million to $105 million.

Following the late Monday announcement, analysts at Cantor Fitzgerald today dropped their investment recommendation for Depomed shares to Hold from Buy. Price target information was not available.

DEPO shares were down 19% $18.63 a share, recovering somewhat from a prior drop earlier Tuesday as low as $17.42 a share.

In other sector news,

(+) OSIR, (+27.9%) Projects FY16 revenue between $100 mln to $110 mln, topping single-analyst estimate by at least $2.5 mln. Restates FY14, FY15 revenue of $46 mln to $50 mln and $85 mln to $90 mln, respectively.

(-) BIOS, (-47.1%) Reports Q3 net loss of $0.12 per share, coming in $0.02 per share wider than Capital IQ consensus. Revenue falls 9.7% to $224.5 mln, topping Street view by $1.2 mln.

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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