The 3 Worst-Performing Health Care Stocks of 2019 So Far
The bad performance of three health care stocks stands out this year: Pfizer, Mylan, and Abiomed.
These stocks sit in the basement of the S&P 500 Health Care sector.
There are some things for which there is no need to be grateful, even on Thanksgiving: plain yams, dry turkey, runaway Thanksgiving Day Parade balloons, and these three health care stocks, which sit in the basement of the S&P 500 Health Care sector.
The sector is up 15.2% so far this year, underperforming the S&P 500, which is up 25.8%. Of the 60 companies in the sector, only a handful are trading at lower prices than when the year started. Among the worst performers are Biogen (ticker: BIIB), which has been through a saga with an experimental Alzheimer’s disease treatment, and AbbVie (ABBV), which is undertaking a controversial purchase of Allergan (AGN).
The bad performance of three health care stocks, however, stands out this year. They are below.
Shares of Pfizer are down 11.4% so far this year. The stock tumbled in June, when Pfizer announced plans to spin off a division that sold off-patent drugs in China. The company was the subject of the cover story in Barron’s this week, which argued that investors should give the stock a serious look. The company has stripped away divisions that offered it steady revenue over the decades, and is now proposing to live almost entirely off the new drugs it can build or buy. It’s a tall order, for a lot of reasons, but one that Pfizer seems well-positioned to fill.
Mylan is down 31.6% this year, though big moves are on the horizon for the disfavored generic drug maker. Weighed down by the opioid litigation, poor sales, manufacturing issues, pricing struggles, and other issues, the stock fell sharply in May, and has struggled to recover. Change is in the works: Next year, Mylan is slated to merge with the off-patent drug unit that Pfizer is spinning off, which sells Viagra and Lipitor and has significant operations in China. The fate of the combined company, which is to be called Viatris, remains to be seen.
The worst-performing health care stock in the S&P 500 so far this year is Abiomed, a medical device maker. The stock is down 39.5% so far this year. Shares of Abiomed tanked in early August on a disappointing earnings report. The Food and Drug Administration said in February that interim results of a post-approval study of an Abiomed heart pump, called the Impella RP system, showed a high mortality rate, but the agency said in May that the benefits of the device “continue to outweigh risks.”
Write to Josh Nathan-Kazis at email@example.com