3 Drug Stocks Plummeting

Five Prime Therapeutics stock is currently the worst on the Nasdaq

Managing Editor
Nov 7, 2017 at 1:27 PM
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Stocks are trading lower this afternoon, despite a brush with record highs this morning. Among the stocks making big moves are pharmaceutical concerns Mallinckrodt PLC (NYSE:MNK), Keryx Biopharmaceuticals (NASDAQ:KERX), and Five Prime Therapeutics Inc (NASDAQ:FPRX). Here's a quick look at what's moving shares of MNK, KERX, and FPRX.

Mallinckrodt Stock Falls on Disappointing Drug Sales

Mallinckrodt stock is down 31% at $21.50, and earlier touched a record low of $19, after the company reported disappointing drug sales for the third quarter. As a result, MNK stock steepened its year-over-year loss to 62%, and is currently the biggest loser on the NYSE.

The stock's Schaeffer's put/call open interest ratio (SOIR) of 2.17 indicates that puts more than double calls among options expiring within three months. This ratio ranks in the 84th percentile of its annual range. However, nine out of 13 analysts following MNK rate the stock a "buy" or "strong buy," leaving the door wide open for potential downgrades.

KERX Gaps Lower After Earnings Miss

Shares of KERX have gapped lower after the company reported a third-quarter earnings miss. The biopharma stock was trading down 15% at $5.25, at last check, in territory not touched since early March. KERX is now down 9% for 2017.

Short interest dropped a little over 9% during the past two reporting periods, but represents more than 21% of the stock's available float. At the stock's average daily trading volume, it would take more than nine days for the shorts to cover. Today, however, KERX is on the short-sale restricted (SSR) list.

Five Prime Plummets to Fresh Lows

Five Prime Therapeutics stock is currently the worst on the Nasdaq, after the firm reported a wider-than-expected third-quarter loss. FPRX stock is trading 35% lower at $28.59, and just touched a fresh two-year low of $21.41. Prior to the stock's rapid plunge, brokerage firm BMO raised its price target to $75 from $71 on FPRX -- almost three times the stock's current price.

Analysts were confident towards the biotech ahead of earnings, however, with all five carrying "strong buy" recommendations. A round of downgrades in the wake of FPRX's steep losses could exacerbate selling pressure.

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