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June 9, 2016

Q1 2016 Share Price Performance (Part 2)

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Tier 1 Canadian Healthcare Companies – negative but no panic

In this blog, I am going to comment on the Q1 performance of the group of 55 companies with share prices of $1.00 or more to start 2016.

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  • Decliners doubled the number of advancers by 37 to 18
  • Average and median share price changes were both -12%
  • Two companies had share price increases of 40% or more
    • BELLUS Healthcare (+56%) – announced the completion of the KIACTA™ (eprodisate) Phase 3 confirmatory study for the treatment of AA amyloidosis; top-line results are expected to be announced in Q2 2016
    • Medicure (+41%) – improved 2015 financial results included net revenue of $22.1 M, adjusted EBITDA was $9.0 M and net income was $1.7 M; Q4 net revenue was $9.5 M compared to $2.4 M for the comparable period in the previous year

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  • Eight companies had share price declines of more than 40%
    • Concordia Healthcare (-41%) – announced good 2015 results and provided the following fiscal 2016 guidance (US$) – revenues of $1,020 to $1,060 M, adjusted EBITDA of $610 M to $640 M, net income of $330 M to $355 M, adjusted EPS of $6.29 to $6.77 and cash tax rate of approximately 10%; the results were probably impacted by the continuing Valeant saga
    • OncoGenex (-44%; U.S. listing only) – some negative clinical news but U.S. sector decline probably the main factor
    • Acasti (-44%) – continuing a share price decline from mid-2013 high of over $40
    • Cardiome Pharma (-52%) – quarterly decline did not appear to be related to any specific event; potential cash concerns may arise towards the end of 2016 due to high sales and marketing expenses
    • ProNAi Therapeutics (-55%; U.S. listing only) – U.S. sector decline probably the main factor; no negative news and no financial concerns
    • Eyecarrot Innovations (-58%) – factors which probably impacted the share price movement include termination of an acquisition, CEO change and sporadic, low-volume trading
    • Tearlab (-62%) – continuing losses and new long-term debt probably contributed to a continuing share price decline
    • Valeant Pharmaceuticals (-76%) – the large number of factors impacting the share price probably included political concerns, delayed financial statements, potential debt restructuring, potential asset sales, management changes and general sector decline

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There was substantial sector noise caused by the Valeant Pharmaceuticals saga and a broad biotech sector decline in the U.S. market. However, there did not appear to be a sector panic and many share prices bounced in the latter part of Q1 and the early part of Q2.

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 [The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog. Past share price performance may not be an indicator of future share price performance. This blog does not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]

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