The Good, The Bad, and The Ugly with The Medicines Company

Josef Ray is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

After the extravagant flair of celebrating Thanksgiving, Christmas, and New Year wears off, it’s common for a lot of people to pay more keen attention to their health. After all, when the guests have left and the parties are over, you tend to notice that you gained more than just a few unwanted pounds; you also increased your chances of getting sick and acquiring illnesses. In my opinion, being more health-conscious pays off not just in terms of your physical well-being, but also with regards to your investments. Just look at the rise of some notable pharmaceutical companies.

The Good Performance

Things are definitely looking up for pharmaceutical major player The Medicines Company (NASDAQ: MDCO) after it announced positive results for its pivotal phase 3 clinical trial of cangrelor, an anti-platelet drug used for intravenous application. The favorable result in the clinical test spells out good news for patients in acute care settings, including those undergoing percutaneous coronary intervention (in case of coronary heart disease), not to mention investors, because shares surged 11.15% to $28.70.

The company, with its niche focused on the treatment of critical care patients through the delivery of medicines to the global hospital marketplace, plans to present its finding in an upcoming scientific meeting.

The Bad Competitor

And speaking of business delegations, Celgene Corporation (NASDAQ: CELG) saw an upgrade in its stocks from Piper Jaffray and RBC Capital Markets after making a positive presentation at the JPMorgan 31st Annual Healthcare Conference in San Francisco. Advancing 4.23% to $89.36, the stock even hit an all-time high of $89.88.

Already considered one of the largest biotech firms in the US with annual sales reaching more than $5 billion, Celgene predicts that it’s well on its way to an even brighter future: sales are forecasted to double to $12 billion by 2017. And with revenues derived from new therapies and new uses for older drugs, the biopharmaceutical company is certainly bound to enter a new growth phase.

The Ugly Turnaround of Events

Peregrine Pharmaceuticals (NASDAQ: PPHM), meanwhile, snagged the spotlight when it jumped an astounding 80%, only to take a backseat shortly afterwards when its stocks took a slide of 2.88% to $2.36. This is because of the controversial phase 2 study of the cancer drug Bavituximab. After releasing a September 2012 report that the anti-body molecule produced a stellar survival result, the biopharmaceutical company backtracked on its claim, causing investors to be confused, and the stock to drop.

While the study is still up in the air, it is left to be seen if Bavi actually have the makings of becoming the next Avastin, a drug licensed to treat different kinds of cancer.

Choosing Your Med

Just like you need to carefully select which medicine to take in accordance with whatever ails you, so should you apply the same sensibility in selecting which pharmaceutical companies to invest in. Since innovations and revolutionary breakthroughs are crucial in the pharmaceutical industry, watch out for companies that constantly conduct studies in an endeavor to improve their products; they will likely have more promising stocks, especially if their clinical trials yield favorable data.


JosefRayDagatan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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