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.


Signup for our daily newsletter and get our best articles emailed right to you!

Results for ARIA
Sam
26 Mar 15 16:10:14
A few more of interest: $AMBA $ADXS $AAL $AMGN $AMZN $ARIA $ARRY $ASHR http://t.co/bh923uwZvq http://t.co/Ol16xvDedf
Evolve Energy
26 Mar 15 15:30:57
This video illustrates the bears vs bulls perfectly! https://t.co/QYN6NWlW32 $CNAT $OREX $ARIA $OTIV $AAPL $FB $GOOG
Stock Rocket
26 Mar 15 15:19:29
$THCZ Has Become One Of The Hottest Penny Stocks Of The Year So Far! Check It Out: http://t.co/3wv3AMJ7Ni $FASC $ARIA $TUCN
Greg David
26 Mar 15 13:16:23
http://t.co/RMvVXnJDpv does trade alerts differently than anyone else. Its super cool. $ARIA $HT $CIM $BAS $ARNA
US_proptrader
26 Mar 15 12:46:04
$AEGR $AMCC $ARIA $BCRX $BDSI $BIB $CLDX $TXMD $XON autocharts @ http://t.co/cLiki3R0GR
Capital Market Labs
26 Mar 15 12:09:37
$PDLI vs. $ACOR vs. $ARIA vs. $GHDX Compared Across 9 Critical Measures Chart: http://t.co/KUNdqU0K62
Stockaholics
26 Mar 15 12:07:17
Our Penny Stock Alerts Gained 600% In 2 Months! Get Our Next Picks Early: http://t.co/tEvkQFqi7N $FASC $ARIA $TUCN
Penny Stockington
26 Mar 15 12:05:50
Our Penny Stock Pick On $THCZ Is Up 321.54% In Less Than 6 Weeks! Big News: http://t.co/PqlF5t9PRj $FASC $ARIA $TUCN
Stock Dawgzz
26 Mar 15 11:51:22
Our Penny Stock Newsletter Alert On $RCGP Gained 57% Mid-Day Today! Blog Update: http://t.co/Dk7CzkVjdH $FASC $ARIA $TUCN
US_proptrader
26 Mar 15 11:37:35
$ACAD $AEGR $AGIO $AKRX $ALKS $ARIA $GERN $WTW $XON autocharts @ http://t.co/cLiki3R0GR
Nico
26 Mar 15 11:03:05
$ARIA closed all 8.3$ profit +0.13$ / Share #trading #WallStreet #stockalert #stockmarket
CÆTUS
26 Mar 15 10:59:51
$ARIA let's go Harvey! @harveyberger @zDonShimoda @adamfeuerstein http://t.co/ibNdXtmVWC
Shane Blackmon
26 Mar 15 10:58:26
@bradloncar yes! I look at $ARIA in 1999, went $.72 to $48 in 4.5 months. That's a bubble! Just a good bull market here in 2015
Trader News Daily
26 Mar 15 10:48:27
Wow http://t.co/PeRPkYu8Uk just posted last weeks results. +429%. Crazy. They offer a free trial too. $BSBR $ARIA $GALE $NBG $MHR
Nico
26 Mar 15 10:43:15
$ARIA so ok thats was very nice, now covered 1/2 TARGET around 8.45 - 8.56 #trading #WallStreet #stockalert #stockmarket
Nico
26 Mar 15 09:54:22
$ARIA here we go again…
Dominique Fontanilla
26 Mar 15 09:29:45
RT @ScripDonnaDC: Ariad shareholder class action dismissed http://t.co/Nft0sFxb7n $ARIA #pharma #biotech
SCRIP Intelligence
26 Mar 15 09:27:26
RT @ScripDonnaDC: Ariad shareholder class action dismissed http://t.co/Nft0sFxb7n $ARIA #pharma #biotech
Penny Stock Secret
26 Mar 15 08:04:23
Gains Over 2500% In one Trade.. Subscribe Here! http://t.co/SVqoMkJ7r9 .. $FASC $ARIA $TUCN
Jim
26 Mar 15 08:03:44
$ARIA (8.07) is trying not to lose touch of its daily TL (8.13), or the 50dma which it is quite removed from could follow at 7.42.
Nico
26 Mar 15 07:37:14
$ARIA re #trading #WallStreet #stockalert #stockmarket
US_proptrader
26 Mar 15 07:22:27
$AKRX $AMBA $ARIA $ARRY $ATML $GERN $LCI $OPK $XON autocharts @ http://t.co/cLiki48C5r
Nico
26 Mar 15 07:21:03
$ARIA long #trading #WallStreet #stockalert #stockmarket
pissoff
26 Mar 15 07:13:56
$ARIA rumored to be takeover target. $ctic $exas $pfe $gsk $azn $shpg $mrk $bac $jpm $ibb
Nico
26 Mar 15 07:11:09
$ARIA reply exactly $IBB 's iShares , perfect for small cap #trading #WallStreet #stockalert #stockmarket
Nico
26 Mar 15 07:03:09
looking $ARIA #trading #WallStreet #stockalert #stockmarket
pissoff
26 Mar 15 06:56:17
$ARIA rumored to be takeover target. $ctic $exas $pfe $gsk $azn $shpg $mrk $bac $jpm
Breaking News
26 Mar 15 06:51:06
$ARIA: Ariad Pharmaceuticals Inc. (NASDAQ:ARIA) Under Legal Obligation ...: http://t.co/Kw0F30XuMP
pissoff
26 Mar 15 06:50:32
$ARIA rumored to be takeover target. http://t.co/HPwlsejtM7 $ctic $exas $pfe $gsk $azn $shpg $mrk $bac $jpm
Market Trader Daily
26 Mar 15 06:47:28
$ARIA 8.20 bounces
AdvantageData
26 Mar 15 06:46:26
Some #corporatebond traders took sector cues from a pullback in tech and biotech shares, with $AMD, $NVDA, $ALXN & $ARIA all tanking value.
pissoff
26 Mar 15 06:46:05
$ARIA strong volume - buyout news soon??? $azn $shpg $cndo $RTRX $abbv $mrk $gsk $azn $bsx $pfe #news #BreakingNews $krft
Stephen s
26 Mar 15 06:39:29
RT @MarkyMarkTrades: I banked over 200% in gains during my 14-day trial with http://t.co/L2jCaEjnpN. Their 5 guru traders are amazing. $A…
Beverage Consulting
26 Mar 15 06:38:36
RT @langanstocks: $CVX News Updated Friday, March 13, 2015 10:03:25 PM $ZIOP $SAM $PVSP $ARIA http://t.co/Uk7syP3bo7
Lusitanian Traders
26 Mar 15 06:24:45
ARIA - Pivots (support and resistance - intraday) $ARIA http://t.co/nbZENOshHw
Mark Trader
26 Mar 15 06:11:55
I banked over 200% in gains during my 14-day trial with http://t.co/L2jCaEjnpN. Their 5 guru traders are amazing. $ARIA $MYEC $SWET
Stephen s
26 Mar 15 06:09:56
RT @BoilerWarrior: http://t.co/iQWRYq6dIh....Top penny stocks, NYSE, and NASDAQ trades from the stock market today. +296% last week. $ARIA…
Breaking News
26 Mar 15 05:55:03
$ARIA $X: Most Desiring Stocks- CymaBay Therapeutics Inc. (NASDAQ:CBAY ...: http://t.co/YgXOJ9ubCc
IDIG_INVESTMENTS
26 Mar 15 04:54:37
$ARIA #PHARMA http://t.co/n2MgIIETrf #HEDGEFUNDS
Capital Market Labs
26 Mar 15 04:45:58
$EBS vs. $ARIA vs. $PDLI vs. $ACOR Compared Across 9 Critical Measures Chart: http://t.co/zLcE5DePV9
Dave Neville
26 Mar 15 04:29:54
Ariad, Execs Beat Fraud Suit Over Failed Leukemia Drug http://t.co/ogvDSiqIdU $ARIA
ProVesting
26 Mar 15 04:10:04
$X $ARIA: United States Steel Corp. (NYSE:X) Issues Statements Regarding ...: http://t.co/lGnhnjWtIl
Joshua Page
26 Mar 15 02:59:51
RT @OphirGottlieb: $FGEN vs. $ARIA vs. $HALO vs. $CBPO Compared Across 9 Critical Measures Chart: http://t.co/y1nWmtaP4k
Ophir Gottlieb
26 Mar 15 02:55:42
$FGEN vs. $ARIA vs. $HALO vs. $CBPO Compared Across 9 Critical Measures Chart: http://t.co/y1nWmtaP4k
The Legacy News
25 Mar 15 22:27:17
Insider Selling: Martin J. Duvall Sells 4,834 Shares of Ariad Pharmaceuticals Stock $ARIA http://t.co/aSEcR9EGJB
Ophir Gottlieb
25 Mar 15 22:15:37
$PDLI vs. $AEGR vs. $EBS vs. $ARIA Compared Across 9 Critical Measures Chart: http://t.co/Wz4WEPbJdd
Stockaholics
25 Mar 15 22:08:28
Our Penny Stock Alerts Gained Over 680% In The Past 2 Months! Special Update: http://t.co/8VP5dUIIVo $FASC $ARIA $TUCN
StockenheimerSchmidt
25 Mar 15 22:05:18
Our Stock Tips Gained Over 600% In The Past 2 Months! Special Update: http://t.co/jUh1Sp2QCy $FASC $ARIA $TUCN
Biotech Stocks
25 Mar 15 21:08:09
$ARIA Form 8-K http://t.co/innMhA564x #biotechstocks #biotech #stocks
SmallCaps
25 Mar 15 21:08:02
Review of Timothy Sykes book: An American Hedge Fund: http://t.co/AKjszqM28B $AMOT $ARIA $BDR $CAMT $CDZI $DGLY $FSI $INTT $MNDO $NVEE
				
				
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.