Sector Update: Health Care Stocks Trimming Earlier Losses Late; Dendreon Plunges on Convertible Note Risks

Top Healthcare Stocks

JNJ -0.43%

PFE -0.50%

ABT -1.05%

MRK +0.79%

AMGN -0.75%

Healthcare stocks were moderately lower today with the NYSE Healthcare Sector Index dropping about 0.2% and shares of healthcare companies in the S&P 500 falling about 0.1% as a group.

In company news, Dendreon ( DNDN ) fell hard Tuesday after the biotechnology company warned it was weighing alternatives for the repayment of $620 million in convertible notes in cash that include "alternatives that could result in leaving our current stockholders with little or no financial ownership."

DNDN shares were down over 35% at $1.37 apiece in late trade, earlier falling to a new all-time low of $1.33 a share.

The 2016 notes currently have a $51.24 conversion price, making it extremely unlikely noteholders will exercise their conversion rights.

"As a result, the company would be required to repay the full $620 million principal amount at maturity, but based on its currently anticipated operating results," it wrote, later stating that "even assuming the realization of future expense reductions that we plan to make and product revenues that we forecast, there is a significant risk that, while we believe we have sufficient cash to meet our ordinary course obligations for at least the next 12 months, we will not be able to repay or refinance the 2016 notes."

The news upstaged better-than-expected Q2 financial results, with the company reporting a net loss of $15.3 million, or $0.10 per share, improving on a $68.8 million net loss during the same quarter last year and beating the Capital IQ consensus looking for a $0.22 per share loss.

Total revenue climbed 12% to $82.2 million, also topping estimates by around $9.1 million.

In other sector news,

(+) ICPT, Said 46% of patients with non-alcoholic steatohepatitis treated with its obeticholic acid drug candidate did not suffer further liver scarring compared with only 21% in placebo group. Now planning late-stage trial during first half of 2015.

(-) INSM, Begins $80 mln underwritten offering of its common stock. At Monday's closing price of $11.81 a share, the company would issue around 6.77 mln shares. Proceeds will fund clinical development of Arikayce treatment for cystic fibrosis.

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

Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

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

Other Topics


Latest Markets Videos


    Founded in 1999, MT Newswires (formerly known as Midnight Trader) is a leading provider of original source, multi-asset class, real-time, global financial news and information to most of the largest banks, brokerage firms and professional market data, trading & research applications in North America.

    Learn More