Merck (NYSE: MRK) stopped its clinical study for Vorapaxar, its cardiovascular drug developed to treat patients with acute coronary syndrome. The announcement issued by MRK mentions that the trial is going to continue for those patients who do not have acute coronary syndrome but have either had a previous heart attack or have peripheral artery disease. Despite the fact that some of the trials will continue, the stock fell 6.62 percent to $34.69 from its January 12th closing price of $37.15.
Losses stretched throughout the sector, although none were as substantial as MRK’s. Pfizer (NYSE: PFE) fell to $18.22, Glaxosmithkline (NYSE: GSK) dropped to $38.88. Eli Lilly (NYSE: LLY) dropped to $34.90 and Novartis AG (NYSE: NVS) fell to $57.03.
In a recent, almost prescient article about purchasing power risk written for Seeking Alpha, (“6 High Yield Pharmaceutical Companies: Do They Justify the Risk?” January 12, 2011, SeekingAlpha.com) Chuck Carnevale had this to say about investing in pharmaceuticals:
The pharmaceutical industry appears to offer a fertile field of opportunity for investors seeking growth of principal and growth of income. Valuations look low and therefore, yields are higher than normally expected for this once high-growth sector. But investors need to keep in mind that investing is a dynamic process where the fortunes of individual companies, and even of complete industries, can rapidly change.
Covestor models with holdings in this sector include: China & India, Micro-Cap Aggressive, Core, MergerArb, and Healthcare.
*Charts and prices courtesy of Yahoo Finance.
