Latest Reports on Diffusion and Merrimack as Drug Stocks are Hit by President Trump's Comments
NEW YORK, NY / ACCESSWIRE / January 12, 2017 / Biotech and Healthcare stocks were slammed Wednesday as President Donald Trump made some critical remarks against the industries at his first news conference since the election. The 5 largest losers in the S&P 500 Index were all pharmaceutical or biotech companies in early trading Wednesday. The iShares NASDAQ Biotechnology Index ETF fell by as much as 4 percent before settling to close down 2.98 percent for the day. The S&P 500 Health Care Sector dropped 1.04 percent.
"Our drug industry has been disastrous," Mr. Trump said in his opening remarks. "They're getting away with murder."
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President Trump's election was initially perceived to be a win for the drug companies as Hillary Clinton had been very critical of drug manufacturers throughout her campaign and vowed to fight the "price gouging" that was happening within the industry. But recent comments made by President Trump have wiped out all the initial gains for drug stocks and have raised some major concerns.
"Pharma has a lot of lobbies, a lot of lobbyists and a lot of power. And there's very little bidding on drugs. We're the largest buyer of drugs in the world, and yet we don't bid properly," Mr. Trump said. "We're going to start bidding and were going to save billions of dollars over a period of time."
Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN)
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Diffusion Pharmaceuticals' shares dropped 28.14 percent to close at $6.00 a share Wednesday. The stock traded between $4.50 and $7.45 on volume of 712,846 shares traded. The company is developing its lead drug, trans sodium crocetinate (TSC), which has received Orphan Drug Designation from the FDA for use in a number of cancers in which tumor hypoxia (oxygen deprivation) diminishes the efficacy of current treatments.
In September 2016, Diffusion announced the successful completion of animal toxicity studies in preparation for a Phase 3 pivotal trial of TSC in newly diagnosed GBM patients. The company's shares were up-listed to the Nasdaq Capital Market, effective November 9, 2016.
Merrimack Pharmaceuticals Inc. (NASDAQ: MACK)
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Merrimack Pharmaceuticals' shares fell 3.24 percent to close at $3.29 a share Wednesday. The stock traded between $3.24 and $3.54 on volume of 16.74 million shares traded. On January 8th, the company announced an agreement to sell some of its oncology assets, which include its first commercial product ONIVYDE and the generic version of DOXIL, to Ipsen SA in deal worth up to $1.025 billion. Merrimack will receive $575 million is cash when the deal closes, and can receive up to $450 million in additional milestone payments, the deal is expected to close by the end of first quarter of this year. Additonally, after the completion of its previously announced strategic pipeline review Merrimack has decided that determined that MM-121, MM-141 and MM-310 are the programs with the highest probability of success and the highest return on investment.
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