logo  
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Investing as Shakespearean Tragedy: The Story of Ariad Pharmaceutical (ARIA)

By  +Follow November 12, 2013 8:57AM
Share:
Tickers Mentioned:

Shares in Ariad Pharmaceuticals (ARIA) were up 10.78 percent on Veterans Day. Even for a small-cap like Ariad, coming in at a valuation just under a half billion dollars, that’s normally what one would consider a pretty solid bounce. That’s a day that, for a lot of investors, would stand out. However, for the battered shareholders of Ariad, it probably doesn’t even register any more. Okay, that’s not true, double-digit jumps always register. But after the Odyssey Ariad’s been on for the last month, it’s not difficult to imagine that days like Monday just get lost in the shuffle.

It’s not often you see a company go on a ride like Ariad just has, plunging sharply, appearing to rally, rinse and repeat. And it’s a drama that’s swept a lot of people up. Over the last 3 months, Ariad’s moved an average of 11.14 million shares a day, good to make it the 75th most traded security over that period, one spot behind Elon Musk’s Tesla Motors (TSLA) , a battleground stock and the source of general market fascination. That’s a class that contains mostly mega-cap blue chips and high-profile ETFS, relatively few small-cap companies. And that’s not even the whole story. Ariad’s heavy volume is drawn mostly from the massive spike this last month. Over the last 30 days Aria has been moving an average of 20 million shares a day, meaning that more than 10 percent of outstanding shares are trading hands on an average day.

So what’s happening with this company? The story’s a simple one, but, for Ariad investors, it’s a tragic one.

Volatile Month

Lets start with the whole story: since the start of October, Ariad Pharmaceutical’s stock has lost over 85 percent of its value. No matter how specifically you pull things apart, that’s the simple fact one cannot avoid. Especially if you’ve owned Ariad for that whole stretch. But inside that one big sell-off is a series of daily price moves that could drive an investor insane. Here’s a timeline or the events that have brought Ariad so much grief:

October 8:

After market close, news gets out regarding the clinical trials for Ariad’s leukemia drug Iclusig and it’s bad. In fact, if you’re long Ariad, it’s positively awful. The drug showed blood clots developing in 11.8 percent of people treated with Iclusig after 24 months. This was a big jump from the 8 percent rate found after 11 months, and it prompts the FDA to block Ariad from enrolling any new patients to drug trials for Iclusig.

Like most small-cap pharma companies, Ariad’s future is tied mainly to just a couple of drugs, and the news that one of them might not be safe is pretty drastic. Especially when one considers that the nearly 800 percent gains from the start of 2010 to October 7 had a lot to do with the fact that Iclusig looked so promising, even getting accelerated approval based on its Phase 2 clinical data.

So it shouldn’t be surprising that the market’s reaction was swift and vengeful. As soon as investors got a crack at selling their position on October 9 shares plummeted over 65 percent.

October 10-18:

If the story ended there, it would be pretty much in line with a familiar narrative: small-cap pharma plummets on negative results of clinical trial. But, while nothing matched the degree of the move on the ninth, Ariad kept trading at heavy volumes and kept posting double-digit moves.

A series of analyst downgrades hit the company on October 10, with Barclays (BCS) downgrading the stock from overweight to underweight and cutting the price target from $25 a share to $4 (ouch). The stock kept falling, losing another 30 percent from October 10-16 but coasting into what appeared to be a bottom on October 16.

Then, on October 17, signs of life! Following comments from JP Morgan (JPM) analyst Cory Kasimov that physicians may not be all that concerned about the blood clots, the stock rebounded, posting a 10.78 percent gain and potentially giving hope to Ariad owners that the worst was behind them.

Except that it wasn’t. Not at all. October 18, word came out that Ariad and the FDA had agreed to halt testing of Iclusig entirely based on the rate of blood clotting incidences. The discontinuation of the late-stage trial dubbed Epic by Ariad caused shares to plunge more than 40 percent that day.

October 21-October 30:

After any stock gets hammered that hard in that short a period, one might expect it to bounce back. At least a little. Considering how steep the discount it’s trading at as compared to a mere two weeks ago, it has to garner at least a little interest, right?

And it did. The company staged a pretty substantial rally, gaining almost 50 percent in just nine days. It’s not much when one considers just how fall the stock fell prior to the rally, but at least the battered shareholders got a respite in the end, right?

October 31:

Only it wasn’t the end. Halloween was extra spooky if you had decided to wait out Ariad’s steep decline. Ariad announced that it would suspend marketing and distribution of Iclusig while it "continues to negotiate updates to the U.S. prescribing information." In retrospect, it certainly seems as though this shouldn’t have been all that surprised, but it clearly surprised at least some people as the company’s stock plunged nearly 45 percent.

And Beyond…?

Where Ariad’s going from here is unclear. Since the start of November, the stock’s up over 15 percent, including a 17.27 percent leap the day after Halloween and Monday’s double-digit gain. However, precisely what to expect moving forward is unclear. In the event that Ariad can return Iclusig to the market and ensure that it’s safe, there’s a pretty good chance the stock takes off. That said, there’s no real way to know whether or not that’s possible. In the meantime, the company announced that it was shedding 40 percent of its American-based workforce on November 7.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for ARIA
PolgarStocks
24 Dec 14 18:18:09
$AMAT Percent Change Updated Wednesday, December 24, 2014 9:07:42 PM $AMT $ARIA $PG $NUGT http://t.co/bu9ZEyOtfo
Rosner Stocks
24 Dec 14 18:15:06
$SBUX Opinions Updated Wednesday, December 24, 2014 8:59:26 PM $AMRN $ARIA $GPRO $APA http://t.co/BtqSDmfagf
Langan Stocks
24 Dec 14 17:13:11
$TWTR Investor Opinions Updated Wednesday, December 24, 2014 8:03:34 PM $DIA $GG $USO $ARIA http://t.co/vGBppkWMNj
Rosner Stocks
24 Dec 14 17:13:11
$PG Filings Updated Wednesday, December 24, 2014 7:59:26 PM $ARIA $IP $IWM $AET http://t.co/tWq66Mn94u
PolgarStocks
24 Dec 14 16:15:22
$EFA Stock Forum Updated Wednesday, December 24, 2014 7:08:53 PM $WFM $EPI $FB $ARIA http://t.co/NXDpSncdnz
Stock Rocket
24 Dec 14 15:21:53
With Penny Stock Picks On $STTK & $RGMI, subscribers saw 671% Gains In One Month! Big Update: http://t.co/oKD4CATaFq $FASC $ARIA $TUCN
Langan Stocks
24 Dec 14 15:11:10
$SMN Company Info Updated Wednesday, December 24, 2014 6:03:20 PM $FEYE $ARIA $FEYE $XLK http://t.co/dZ7GxGpLGu
Trader News Daily
24 Dec 14 15:08:12
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $BSBR $ARIA $GALE $NBG $MHR
OTPicks.com
24 Dec 14 14:52:52
http://t.co/NYsxQOU64w Jake13: $ARIA Sell? Click here to find out if $ARIA is a: Jake13 http://t.co/zFx2eJhysc http://t.co/NYsxQOU64w
OTPicks.com
24 Dec 14 14:52:50
http://t.co/QkCFZ8YF3c Jake13: $ARIA Sell? Click here to find out if $ARIA is a: Jake13 http://t.co/L4UAh8nzIX http://t.co/QkCFZ8YF3c
IH News Desk
24 Dec 14 14:29:08
$TASR Stock Forum Updated Wednesday, December 24, 2014 5:11:05 PM $HPQ $GG $CTIX $ARIA http://t.co/3ptsklYKh6
Rosner Stocks
24 Dec 14 14:10:09
$COST Financials Updated Wednesday, December 24, 2014 4:59:27 PM $FEYE $KRED $CELG $ARIA http://t.co/PwxlRizwQF
Langan Stocks
24 Dec 14 14:10:03
$ARIA Financials Updated Wednesday, December 24, 2014 5:03:20 PM $UNG $KKR $MU $GDXJ http://t.co/2JJso4BwqF
Rosner Stocks
24 Dec 14 12:08:11
$GMCR Company Info Updated Wednesday, December 24, 2014 2:59:26 PM $KO $HD $ARIA $XLV http://t.co/U3BAYnFSQt
Rosner Stocks
24 Dec 14 12:08:09
$IBB Financials Updated Wednesday, December 24, 2014 2:59:26 PM $BABL $ORCL $VZ $ARIA http://t.co/SEOUraTz9y
StockAviator.com
24 Dec 14 11:40:42
Join thousands of traders at http://t.co/30Wzoc9t1Q. 5 pro trading gurus alerted 500% gains last week. $GSAT $BBRY $ZNGA $RAD $ARIA
PolgarStocks
24 Dec 14 11:10:44
$WLL Last Price Updated Wednesday, December 24, 2014 1:07:14 PM $ABX $ARIA $OIL $FNMA http://t.co/fCMJehrOBS
Rosner Stocks
24 Dec 14 11:07:35
$JNK Filings Updated Wednesday, December 24, 2014 1:59:28 PM $XLI $AUY $OIL $ARIA http://t.co/0V7zsQBi1U
Wall Street
24 Dec 14 10:58:17
http://t.co/iQWRYqnOQl....Top penny stocks, NYSE, and NASDAQ trades from the stock market today. +296% last week. $ARIA $MYEC $SWET
PolgarStocks
24 Dec 14 10:10:34
$VXX Stock Price Updated Wednesday, December 24, 2014 12:07:16 PM $ARIA $BLTA $AAPL $QCOM http://t.co/fHj41i9z2f
Investors Hangout
24 Dec 14 10:01:10
Jake13: $ARIA Sell? Click here to find out if $ARIA is a http://t.co/wiVP6vU3Qd
Investors Hangout
24 Dec 14 10:01:10
Jake13: $ARIA Sell? Click here to find out if $ARIA is a http://t.co/Lr3BqOzABa
Stock Rocket
24 Dec 14 09:54:57
With Penny Stock Picks On $STTK & $RGMI, subscribers saw 671% Gains In One Month! Big Update: http://t.co/oKD4CATaFq $FASC $ARIA $TUCN
Extreme Stocks
24 Dec 14 09:54:30
Jake13: $ARIA Sell? Click here to find out if $ARIA is a http://t.co/6WvjwG7DPj
Jake13
24 Dec 14 09:41:55
$ARIA Sell? Click here to find out if $ARIA is a buy hold or sell. Watching these stocks. $BLTA $AMAT $TGT $SB http://t.co/M4Ldc9pik5
lookn4wins
24 Dec 14 09:38:57
$BABA Stock Chart $BABA Most recent stock chart and technical analysis. $LEG $ARIA $RCPI $NWBO $TBT $TVIX http http://t.co/2xuy6L8SFM
Dave
24 Dec 14 09:10:41
I didnt know the pro members get the opening bell alerts from http://t.co/qY5MPlJPrU 1 day early. $ARIA $HK $GERN $NIHDQ $AU $SIMH
Jake13
24 Dec 14 09:02:56
$RFMD Buy? Click here to find out if $RFMD is a buy hold or sell. Watching these stocks. $ARIA $JNJ $NUGT $KGC http://t.co/xvDQOH5f5b
12Stocks.com
24 Dec 14 08:53:08
MidCap #Stocks Performance $GLNG $UAL $FNF $NSM $INCY $ALXN $ARIA $MDVN $ILMN $AAL $VRTX $ALK $NRG $STRZA more@ http://t.co/gYYX3fEVde
ProVesting
24 Dec 14 08:48:03
$ARIA: Ariad co-opts Otsuka for Iclusig in Japan and other Asian countries http://t.co/4ZllllhjIt http://t.co/fUOQsVCLjp
Investors Hangout
24 Dec 14 08:21:34
DennyT: FB Major Holders $FB $SMH $ARIA $ABBV $BLTA http://t.co/nXrCTmWG5Y
Investors Hangout
24 Dec 14 08:21:16
DennyT: FB Major Holders $FB $SMH $ARIA $ABBV $BLTA http://t.co/5IV6rxQixK
Dave
24 Dec 14 08:16:27
Nailed over 200% in gains this week at http://t.co/qY5MPlJPrU. Pro members get alerts 1 day early. $ATML $XRX $GGB $BAXS $ARIA
Trader News Daily
24 Dec 14 08:09:28
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $BSBR $ARIA $GALE $NBG $MHR
PolgarStocks
24 Dec 14 08:09:24
$VZ Reviews Updated Wednesday, December 24, 2014 10:07:12 AM $ARIA $EBAY $BBBY $AUY http://t.co/D8bWHQ7erC
Extreme Stocks
24 Dec 14 08:07:43
danrocks: $T Hit my list a few days ago $ARIA $UVXY $CTRP http://t.co/IQnA9RtkeI
Extreme Stocks
24 Dec 14 08:07:42
DennyT: FB Major Holders $FB $SMH $ARIA $ABBV $BLTA http://t.co/9qDzwK42sv
Langan Stocks
24 Dec 14 08:04:42
$BIB Stock Message Board Updated Wednesday, December 24, 2014 10:03:19 AM $DRYS $IWM $ARIA $OHI http://t.co/4BcJRreO67
Langan Stocks
24 Dec 14 08:04:36
$ARIA Stock Price Updated Wednesday, December 24, 2014 10:03:19 AM $UNG $QCOM $SLW $SWIR http://t.co/wHMWVc8eBj
Investors Hangout
24 Dec 14 08:03:48
danrocks: $T Hit my list a few days ago $ARIA $UVXY $CTRP http://t.co/dRyKBq5oUN
Investors Hangout
24 Dec 14 08:03:48
danrocks: $T Hit my list a few days ago $ARIA $UVXY $CTRP http://t.co/HVuGdX5eUs
danrocks
24 Dec 14 08:01:35
$T Hit my list a few days ago $ARIA $UVXY $CTRP $UNP $FNV http://t.co/wL5YuNg5ri
iHangout
24 Dec 14 07:55:11
DennyT: Cheeky's Board!: FB Major Holders $FB $SMH $ARIA $ABBV $BLTA http://t.co/xJI5Qy8Ijq
DennyT
24 Dec 14 07:53:55
FB Major Holders $FB $SMH $ARIA $ABBV $BLTA Opinion Today,Daily Chart,Close,Company News,Is this one to watch? http://t.co/jSVpxP0BiJ
Penny Stock Secret
24 Dec 14 07:27:14
The Stock Picking Service of 2014 Watch This! Here http://t.co/SVqoMlijqL .. $FASC $ARIA $TUCN
John Smith
24 Dec 14 07:06:43
$ARIA will Otsuka Pharma buyout Ariad?!!!!$avnr #cash #breakingnews #oil #stocks #investing $abbv #cnbc #msnbc $ctic $dndn $bac #NYSE
Investors Hangout
24 Dec 14 07:04:14
lookn4wins: $ARIA Candlesticks $ARIA Most recent stock chart http://t.co/pGesqcwUWZ
Investors Hangout
24 Dec 14 07:04:13
lookn4wins: $ARIA Candlesticks $ARIA Most recent stock chart http://t.co/gchSDbbQNy
Langan Stocks
24 Dec 14 07:04:12
$DIS Stock Forum Updated Wednesday, December 24, 2014 09:03:17 AM $GDX $AJAC $ARIA $BAC http://t.co/Futep4cxUa
Rosner Stocks
24 Dec 14 07:02:13
$ARIA News Updated Wednesday, December 24, 2014 08:59:23 AM $CTIX $ECIG $QCOM $XLP http://t.co/TCH2vV3EJb
				
				
By  +Follow November 12, 2013 8:57AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.