3 Drug Stocks Near the Bottom of the Nasdaq Today

Fresenius has accused Akorn of misleading the FDA

by Patrick Martin

Published on May 2, 2018 at 3:22 PM

The Nasdaq is outperforming today, thanks to a positive earnings reaction for Apple (AAPL). Nevertheless, drug stocks Akorn, Inc. (NASDAQ:AKRX)Esperion Therapeutics Inc (NASDAQ:ESPR), and Gilead Sciences, Inc. (NASDAQ:GILD) are all trading dramatically lower. Here's a closer look at what has shares of AKRX, ESPR, and GILD near the bottom of the Nasdaq today.

Akorn Stock Hits New Low on Fresenius Fraud Claims

Akorn stock is down 16% to trade at $12.40 -- fresh off a five-year low of $12.34 -- after German healthcare group Fresenius accused Akorn's top officials of "blatant fraud" while submitting suspect testing data to the Food and Drug Administration (FDA). Fresenius said it would buy Akorn for $4.75 billion in April, but pulled out of the deal following data integrity concerns.

Although the stock is currently short-sale restricted, short sellers remain in control of a stock that's now down 61% year-to-date. Although short interest fell 8% in the most recent reporting period, more than 10% of AKRX's total available float is still dedicated to these bearish bets.

Esperion Stock at Risk for Bearish Analyst Backlash

Esperion stock is down 30.2% to trade at $67.14, after safety concerns emerged in late-stage trial data for the drugmaker's cholesterol-lowering treatment. ESPR stock is now on track for its worst single-day session since June 2016, and is in danger of closing below its 320-day moving average for the first time since February 2017. Prior to today, the security was trading above its year-to-date break-even mark, and scored a two-year high of $82.68 on Feb. 27. 

Continued downside could have analysts re-evaluating their ratings. Currently, seven of 11 covering brokerages maintain a "strong buy" recommendation, with not a single "sell" to be found. Plus, the average 12-month price target of $95.77 is nearly double the equity's current price.

Gilead Sciences Stock In Trouble Amid Sinking Hep C Sales

Gilead Sciences stock is stumbling-- down 7.6% to trade at $67.04 -- after the company reported lower-than-estimated quarterly profit due to lagging hepatitis C drug sales. The drug stock is also reacting to news that U.S. approved a blood cancer treatment from rival Novartis, which will likely compete with GILD's lymphoma drug.

GILD stock is now down 6% year-to-date, and is 25% off its 21-month high of $89.54 from January. Many analysts remain in the security's corner, though. Of the 21 brokerages covering GILD, 13 rate it a "buy" or "strong buy." Furthermore, GILD's average 12-month price target of $86.78 is a 29% premium to the stock's current price. Downgrades and/or price-target cuts could push the struggling biotech stock even lower.

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