Rotten Tomato Stocks
No Result
View All Result
  • News
    Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

    Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

    Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

    Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

    Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

    Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

    Dozens of chicken products recalled from Dunnes, Aldi, Tesco, Lidl in urgent ‘do not eat’ warning

    Dozens of chicken products recalled from Dunnes, Aldi, Tesco, Lidl in urgent ‘do not eat’ warning

  • NYSE
    AmEx Profits Fall 9% as Customers Fall Behind on Payments

    AmEx Profits Fall 9% as Customers Fall Behind on Payments

    Devon Energy Corp. stock falls Friday, underperforms market

    Devon Energy Corp. stock falls Friday, underperforms market

    Calix (NYSE:CALX) Shares Down 4.4% Following Analyst Downgrade

    Calix (NYSE:CALX) Shares Down 4.4% Following Analyst Downgrade

    Freeport-McMoRan 4Q Profit Falls as Copper Prices Decline

    Freeport-McMoRan 4Q Profit Falls as Copper Prices Decline

  • NASDAQ
    Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

    Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

    Biogen Inc. stock falls Friday, underperforms market

    Biogen Inc. stock falls Friday, underperforms market

    ShockWave Medical (NASDAQ:SWAV) Stock Price Down 3.7% on Analyst Downgrade

    ShockWave Medical (NASDAQ:SWAV) Stock Price Down 3.7% on Analyst Downgrade

    Intel stock drops nearly 10% after earnings miss, execs predict quarterly loss as data-center market shrinks

    Intel stock drops nearly 10% after earnings miss, execs predict quarterly loss as data-center market shrinks

  • OTC
    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    Corus Entertainment 4Q Profit Falls

    Corus Entertainment 4Q Profit Falls

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

  • TSX
    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    Bitcoin Is Falling: Should You Buy the Dip?

    Bitcoin Is Falling: Should You Buy the Dip?

    CN Rail Stock Is So Undervalued That it’s Absurd

    CN Rail Stock Is So Undervalued That it’s Absurd

  • News
    Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

    Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

    Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

    Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

    Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

    Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

    Dozens of chicken products recalled from Dunnes, Aldi, Tesco, Lidl in urgent ‘do not eat’ warning

    Dozens of chicken products recalled from Dunnes, Aldi, Tesco, Lidl in urgent ‘do not eat’ warning

  • NYSE
    AmEx Profits Fall 9% as Customers Fall Behind on Payments

    AmEx Profits Fall 9% as Customers Fall Behind on Payments

    Devon Energy Corp. stock falls Friday, underperforms market

    Devon Energy Corp. stock falls Friday, underperforms market

    Calix (NYSE:CALX) Shares Down 4.4% Following Analyst Downgrade

    Calix (NYSE:CALX) Shares Down 4.4% Following Analyst Downgrade

    Freeport-McMoRan 4Q Profit Falls as Copper Prices Decline

    Freeport-McMoRan 4Q Profit Falls as Copper Prices Decline

  • NASDAQ
    Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

    Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

    Biogen Inc. stock falls Friday, underperforms market

    Biogen Inc. stock falls Friday, underperforms market

    ShockWave Medical (NASDAQ:SWAV) Stock Price Down 3.7% on Analyst Downgrade

    ShockWave Medical (NASDAQ:SWAV) Stock Price Down 3.7% on Analyst Downgrade

    Intel stock drops nearly 10% after earnings miss, execs predict quarterly loss as data-center market shrinks

    Intel stock drops nearly 10% after earnings miss, execs predict quarterly loss as data-center market shrinks

  • OTC
    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    Corus Entertainment 4Q Profit Falls

    Corus Entertainment 4Q Profit Falls

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

  • TSX
    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    Bitcoin Is Falling: Should You Buy the Dip?

    Bitcoin Is Falling: Should You Buy the Dip?

    CN Rail Stock Is So Undervalued That it’s Absurd

    CN Rail Stock Is So Undervalued That it’s Absurd

No Result
View All Result
Rotten Tomato Stocks
No Result
View All Result

Delayed IPOs and Market Drops Batter Biotech Stocks

Editorial Staff by Editorial Staff
May 25, 2021
0
Delayed IPOs and Market Drops Batter Biotech Stocks

Stock markets worldwide have experienced painful instability in the last few months. As a result, the European biotech market has seen stock prices falling and IPOs postponed.

The Covid-19 pandemic was a major disruption for stock markets across the globe at the start of 2020. However, markets like Euronext and the tech-focused Nasdaq rallied and even flourished in late 2020, with biotech companies getting swept up in the excitement.

In February 2021, this hype came to a grinding halt as major stock markets were hit by a stock price drop of 10% or more — a phenomenon known as a correction. This was also visible in biotech stock indices on both sides of the Atlantic including Euronext’s Next Biotech Index and the Nasdaq Biotech Index, which monitor the performance of multiple biotech company stock prices.

While these biotech indices stabilized somewhat in March and April, early May saw another noticeable drop.

“After a stellar 2020 … it seems fair that the sector takes a breath,” said Bertrand Delsuc, CEO and founder of the business intelligence firm Biotech Radar.

The roaring IPO market of the past year has also been hit. Some IPOs have underperformed, like in the case of Vera Therapeutics, whose offering failed to meet its target price. Earlier this month, the UK company Gyroscope Therapeutics even postponed an IPO on the Nasdaq. 

“Many specialist funds are down considerably this year, which dampens IPO appetite as investors become more portfolio- and active position-minded,” said Dylan van Haaften, Equity Research Analyst at the investment bank Bryan, Garnier & Co.

On the other hand, a number of star fundraisings on the Nasdaq recently bucked the trend. Early this month, the French vaccine company Valneva went public with a €77.9M ($93.5M) fundraise and last week saw a €1.2B ($1.4B) IPO by the Swedish dairy alternative company Oatly.

A great part of the market uncertainty stems from broad macroeconomic factors like inflation fears in the US, which affect markets around the world.

“Inflation pressures are going to be rising, and they’re not going to be temporary,” said Jeremy Gatto, Investment Manager at Unigestion, in an article by Reuters this month. “What does that mean? Effectively that [interest] rates will be rising.”

There are also concerns specific to the biotech and pharma industries at play. For example, drug pricing debates by US lawmakers are causing worry for the bottom line of many companies. Additionally, the fear of tighter regulatory controls on drug approvals and M&A deals is in the air.

“The sector was reassured by the approval of Alexion’s acquisition by AstraZeneca, but what about other transactions?” said Delsuc. “Smaller caps seem to have reacted negatively on this point.”

Unsurprisingly, some companies are seeing steeper stock drops than others. The Belgian-Dutch player Galapagos was one notable casualty — a company that last year earned an EMA approval of its lead candidate, but also a string of bad luck, including a rejection by the FDA and the clinical failure of a different drug program. In the last few weeks, one of Galapagos’ prominent US investors, Capital Group Companies, also sold off shares in the company.

 “Capital Group Companies totally exited [Galapagos],” said Delsuc. “When such an event occurs, it hurts a lot.”https://flo.uri.sh/visualisation/6191342/embed?auto=1A Flourish chart

The Danish company Genmab, whose partner Novartis recently received EMA approval for their multiple sclerosis drug Kesimpta, also saw a rough quarter. Its earnings were hit by a royalties dispute with Johnson & Johnson over the blood cancer drug Darzalex Faspro. 

Meanwhile, the stock price of the Dutch heavyweight argenx is being rocked by several challenges. For example, the company is navigating the daunting task of launching its first drug: efgartigimod, which is awaiting FDA approval for myasthenia gravis. In addition, argenx would likely have the launch complicated by the pandemic.

At the same time, some companies are emerging relatively unscathed. One is Evotec in Germany, whose business model is more diversified than those of many biotech companies. Another is compatriot firm BioNTech, whose promising revenues from its Pfizer-partnered Covid-19 vaccine have catapulted its stock price in the last few months.

Macro market conditions aren’t the only factor in some of these biotech stock price troubles. For instance, bad press has struck the gene therapy field in the form of safety scares in the last several months. 

In the case of uniQure in the Netherlands and bluebird bio in the US, gene therapy trials were paused to investigate cancer cases in a few patients. A trial of a Parkinson’s disease gene therapy developed by the US players Voyager Therapeutics and Neurocrine Biosciences was halted by the FDA in December after MRI abnormalities were found in some patients, leading Neurocrine to pull out of that part of the collaboration. 

Most recently, the US company Adverum Biotechnologies reported that a patient went blind in one eye after being injected with its experimental treatment for diabetic macular edema in a phase II trial. For Gyroscope Therapeutics, which is also developing a gene therapy for a blindness disorder, this environment would provide a disincentive to list right now.

“This newsflow is likely to be the principal contributor to why [Gyroscope’s] IPO was pulled,” said van Haaften.“Furthermore, we have seen gene therapy valuations come down considerably, so perhaps Gyroscope is better off IPOing at a more opportune time.”

While it’s impossible to predict when biotech stock prices will recover, corrections last on average for several months. A similar rough patch of falling stocks and delayed IPOs struck the Nasdaq between October and December 2018, before the market rebounded. 

“Public market investors in biotech had a few good years with solid appreciation across the board, the recent volatility is macro-driven and everyone is dealing with it,” said van Haaften.

The outcome depends on a whole range of factors. Companies in countries that are beginning to open up from lockdowns may recover faster; the EU’s recovery could be slowed by a sluggish start to its vaccination rollout. And the drug pricing discussions in the US will continue to influence stock prices.

A major sign of ongoing investor confidence in the biotech sector is high-profile mergers of biotechs with Special Purpose Acquisition Companies (SPACs), which are shell companies formed to allow an existing firm to go public without an IPO. One example this month was a merger between the US synbio player Ginkgo Bioworks and the SPAC Soaring Eagle Acquisition Corp, which valued Ginkgo at €14.6B ($17.8B).

“I would say certain recent SPAC deals like Soaring Eagle and Ginkgo Bioworks are a more fundamental gauge of sentiment at this stage, as this reflects the immense appetite of more generalist capital for secular growth healthcare plays,” said van Haaften.

In terms of the broader macro factors, such as rising interest rates, the healthcare sector is often less affected than other sectors, and for a shorter time. Therefore, according to van Haaften, companies should be aware of the current stock market situation, but not alarmed.

Related Posts

Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss
News

Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

January 30, 2023
Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023
News

Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

January 26, 2023
Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office
News

Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

January 25, 2023
Dozens of chicken products recalled from Dunnes, Aldi, Tesco, Lidl in urgent ‘do not eat’ warning
News

Dozens of chicken products recalled from Dunnes, Aldi, Tesco, Lidl in urgent ‘do not eat’ warning

January 25, 2023
Load More
Next Post
Is McCormick (NYSE:MKC) Using Too Much Debt?

Is McCormick (NYSE:MKC) Using Too Much Debt?

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

POPULAR NEWS

CNH Industrial (NYSE:CNHI) Use Of Debt Could Be Considered Risky

CNH Industrial (NYSE:CNHI) Use Of Debt Could Be Considered Risky

April 14, 2021
CN Rail Stock Is So Undervalued That it’s Absurd

CN Rail Stock Is So Undervalued That it’s Absurd

May 2, 2021
US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

June 17, 2021
Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

September 14, 2021
10 Warning Signs That Should Tell You “This Stock is in Trouble”

10 Warning Signs That Should Tell You “This Stock is in Trouble”

November 11, 2019

EDITOR'S PICK

Block stock drops after earnings, as Square’s parent company swings to a loss

Block stock drops after earnings, as Square’s parent company swings to a loss

August 4, 2022
These 3 Companies Just Crushed Earnings But Their Stocks Fell Anyway

These 3 Companies Just Crushed Earnings But Their Stocks Fell Anyway

May 14, 2021
Berger Montague Investigates Securities Fraud Allegations Against Emergent BioSolutions Inc. (EBS); Lead Plaintiff Deadline is June 18, 2021

Berger Montague Investigates Securities Fraud Allegations Against Emergent BioSolutions Inc. (EBS); Lead Plaintiff Deadline is June 18, 2021

May 24, 2021
UK Watchdog Opens Investigation Into Motorola’s Airwave Network

UK Watchdog Opens Investigation Into Motorola’s Airwave Network

October 25, 2021

Stay Updated

Get breaking news delivered straight into your inbox

Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Rotten Tomato stocks is a wholly-owned subsidiary of Grainne Capital Limited.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

Rotten Tomato Stocks cover the companies and markets that are declining, failing or headed for disaster. We help investors spot the down tends and recognize when something smells rotten.

RECENT POSTS

Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

AmEx Profits Fall 9% as Customers Fall Behind on Payments

Devon Energy Corp. stock falls Friday, underperforms market

POPULAR POSTS

Calix (NYSE:CALX) Shares Down 4.4% Following Analyst Downgrade

Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

Biogen Inc. stock falls Friday, underperforms market

© Copyright 2021 RottenTomatoStocks. All Rights Reserved 

Disclaimer | Privacy Policy

No Result
View All Result
  • HOME
  • NEWS
  • NYSE
  • NASDAQ
  • OTC
  • TSX

© 2021 RottenTomatoStocks.com

error: Content is protected !!
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.