2 Drug Stocks Getting Crushed Today

BCRX and MNK are at fresh lows today

by Patrick Martin

Published on May 21, 2019 at 10:07 AM

Two drug names are sitting at the bottom of the Nasdaq and NYSE this morning. First, BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is down 51.3% to trade at $3.60, and earlier tapped a new two-and-a-half year low of $3.40, after receiving subpar results from its late-stage genetic condition study. 

This is shaping up to be BioCryst stock's worst day since February 2016. Since almost breaking into double digits in late January, BCRX has carved out a channel of lower highs and lows. The equity has now breached its 12-month breakeven point and landed on the short-sale restricted (SSR) list today, notable considering 17% of its total available float is sold short.

Analyst sentiment remains bullishly skewed. Of the seven brokerages covering BCRX, five rate it a "strong buy," with not a single "sell" rating to be found. Plus, the security's consensus 12-month price target sits all the way up at $13.29, territory not seen since late 2015. 

Joining BioCryst in the cellar today is Mallinckrodt PLC (NYSE:MNK), down 31.6% to trade at $8.91, and earlier falling to a record low of $8.45, after the U.K.-based drugmaker filed a lawsuit against the U.S. Department of Health and Human Services (HHS) over patient access to its Acthar gel. Mallinckrodt is challenging the HHS ruling that would "substantially eliminate" Medicaid net sales of the drug. 

Mallinckrodt stock is heading toward its fifth straight loss and its worst single-session drop since November 2017. Even prior to today's drop, MNK had shed 40% this quarter. The Acthar Gel has been at the center of the stock's freefall; whistleblower documents have revealed bribes behind the drug used to treat rare infant seizure disorder. 

Mallinckrodt's fall today has also landed the stock on the SSR list. That's notable considering a whopping 33% of MNK's total available float is sold short, and is 11.6 times the average daily trading volume. 

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