According to the Economist, Horizon Pharma increased the cost of Vimovo by about 600 % in 2013 after purchase from AstraZeneca. Since price movement of HZNP has been strongly correlated to price movement of VRX recently , I think scrutiny of companies who institute sharp increases in drug prices (what is currently plaguing VRX stock price) is probably a more valid reason for the underperformance of HZNP in the weak biotech group than the Depomed proposed merger or hedge fund manipulation. In any event, I wasn't aware of this until I read the Economist article.
That seems logical. I'm guessing that the hedge funds were overexposed as well, and now are taking the opposite path to force all biotechs and especially Horizon down. I'll be glad when they move on, but for now the chart damage for almost all of my favorites is severely damaged, so I'll have to wait until bases start to form. I guess there will be opportunities in the sector in the future, and I would think that the depressed prices would be causing some of the major pharmas significant salivation.
I'm wondering if anyone has thoughts on why HZNP seems to be among the worst performing stocks in the biotech group. I sold HZNP 14 in January for a 9% gain (big mistake), but fortunately sold DEPO at 32.75 for a 44% gain. I am starting to get interested, but the technical damage looks so bad and I already have alot of biotech stocks---so I'm not willing to commit until it tries to base for awhile.
Just curious, as HZNP seems to have among the highest growth rates in the group.