GSK, Merck shares win as 2016 brings big moves. Losers? You know who

This year’s stock market hasn’t been easy for pharma. Unwelcome news has sent some drugmakers' shares tumbling--sometimes by quite a lot. But some companies definitely have it better than others.

We’ll start with the bad news first. Valeant Pharmaceuticals ($VRX), everyone’s favorite punching bag these days, has watched its shares plummet by 72% so far in 2016, according to Bernstein analysts. That’s the worst performance in specialty pharma, and no wonder: Valeant has put out a steady stream of bad news, from investor lawsuits to federal investigations, and cut its guidance for this year’s financials.

Endo ($ENDP), which has been likened to Valeant for its reliance on growth-by-M&A history and price increases, has suffered almost as much: Its shares have taken a 62% hit this year. The company “drastically” lowered guidance and postponed some debt payoffs; one analyst even said he “can’t see a reason” to own the company’s shares. Endo also cut 740 jobs in May, proposed some asset sales in June, and in August, pulled an app for abuse-deterrent labeling on its pain drug Opana.

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Then there’s Alkermes ($ALKS), with a 44% decline, after its lead drug--an antidepressant--fell short in two late-stage trials unveiled in January. The company blamed a “significant placebo effect” for the drug’s failure in one trial, but touted “supportive evidence” for efficacy in the other trial. Investors slammed the company, and Alkermes lost $4 billion off its market cap by the end of that day.

And Perrigo ($PRGO), whose CEO Joseph Papa jumped ship for the same job at Valeant. Papa had already faced some criticism for fending off a Mylan ($MYL) buyout last year, but as soon as he left, company executives piled on with more--and slashed Perrigo’s 2016 guidance, too. Earlier this month, the company took 17% off its forecast for the year, citing pricing pressures in its generics business. Its shares are down 37% so far this year, Bernstein says.

Which companies are on the positive side of the ledger? Sagent Pharmaceuticals ($SGNT), the generic injectables specialist, with a 37% upside, is far and away the leader. But GlaxoSmithKline ($GSK) is way up, too, as CEO Andrew Witty has announced a string of good news--street-beating revenue and earnings, a long-awaited quickening in GSK’s new respiratory portfolio, and an 11% leap in Q2 vaccines sales, among other things. The Big Pharma’s stock is 23% higher now than it was at the New Year.

Then there’s Merck ($MRK), with a 20% hike. Much of that increase is recent: The company’s immuno-oncology med Keytruda now looks like the clear leader in lung cancer, after Bristol-Myers Squibb’s ($BMY) Opdivo fell short in a trial in previously untreated patients. Analysts boosted Keytruda estimates by $2 billion and more, and Merck’s shares skyrocketed.

Shire’s ($SHPG) up too--17%, to be exact, on the heels of its big Baxalta acquisition. The company also won FDA approval of its new dry-eye med Xiidra, expected to give Allergan’s ($AGN) rival Restasis a serious run for its money, and said it can squeeze more costs out of integrating Baxalta than previously thought.

Related Articles:
Alkermes slammed as top depression drug fails two PhIIIs
Valeant investors fret as new Perrigo CEO slams Papa's performance
Valeant's lenders loosen up, but T. Rowe throws another lawsuit on the pile
Endo keeps up its Valeant act with asset-sale talks
Merck's Keytruda fortunes look even better as doctors digest Opdivo's lung cancer failure
With strong Q2, GSK chief Witty sees solid growth platform for his as-yet-unnamed replacement
Forget $500M in postmerger cost cuts. Shire now sees far more savings, and beats on Q2 besides

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