logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

 

Equities – Your destination to connect with the growth investment community.

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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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

Results for ARIA
Capital Market Labs
21 Apr 15 02:07:04
$AMAG vs. $ACOR vs. $FGEN vs. $ARIA Compared Across 9 Critical Measures http://t.co/u1VVq2EKi3 http://t.co/N89gGrhaxm
Capital Market Labs
21 Apr 15 01:36:05
$AMAG vs. $FGEN vs. $ARIA vs. $NLNK Compared Across 9 Critical Measures http://t.co/mJpvJ3l8Cv http://t.co/7jYXOogbbs
Capital Market Labs
21 Apr 15 01:30:04
$AMAG vs. $ARIA vs. $PDLI vs. $FGEN Compared Across 9 Critical Measures http://t.co/6qyf0648rP http://t.co/EeiADAKWOk
Capital Market Labs
20 Apr 15 22:21:02
$ACOR vs. $AMAG vs. $PDLI vs. $ARIA Compared Across 9 Critical Measures http://t.co/Hbi8OFbA9j http://t.co/1nQ9OLf3sO
Capital Market Labs
20 Apr 15 22:14:05
$ACOR vs. $ARIA vs. $FGEN vs. $PDLI Compared Across 9 Critical Measures http://t.co/EhKSJg6Yam http://t.co/vzKgmHAWQc
Stock Dawgzz
20 Apr 15 21:19:24
$OSLH Became One Of The Most Powerful Penny Stocks Last Week! Special Update: http://t.co/rQZs5CWxta $FASC $ARIA $TUCN
Stockaholics
20 Apr 15 20:32:15
Our Penny Stock Alert On $OSLH Gained 97% In 3 Days! Big News: http://t.co/VsDv7ywE5E $FASC $ARIA $TUCN
Capital Market Labs
20 Apr 15 20:29:05
$AMAG vs. $ACOR vs. $ARIA Compared Across 9 Critical Measures http://t.co/67BfT7sdxc http://t.co/PTG0ZbX6VL
Stock Rocket
20 Apr 15 20:26:04
Our Stock Pick On $THCZ Is Up 481.54% From Our Initial Release! Major News: http://t.co/bLXWVUwpQ7 $FASC $ARIA $TUCN
DayTrading Power
20 Apr 15 20:12:57
stalking the following stocks for my opening bell play: $GENE $NVGN $VGGL $AKS $ARIA $ACHN $ZIOP
Capital Market Labs
20 Apr 15 19:46:03
$PDLI vs. $ACOR vs. $ARIA vs. $GHDX Compared Across 9 Critical Measures http://t.co/HGqDywfHvC http://t.co/Khy6waGffu
Anthony DePaola
20 Apr 15 19:08:29
Sarissa Capital has a 6.9% stake, $RHHBY, $CELG, $GILD, all potentional suitors for $ARIA, which had put sellers this afternoon.
Capital Market Labs
20 Apr 15 18:25:04
$NLNK vs. $MACK vs. $FGEN vs. $ARIA Compared Across 9 Critical Measures http://t.co/Bxa7MsOVSC http://t.co/WkNZNk5eQl
StockenheimerSchmidt
20 Apr 15 18:22:03
Platinum Members Saw Our Stock Alerts Gain Over 1600% In 4 Months! Subscribe Here: http://t.co/vy1bjuKyNv $FASC $ARIA $TUCN
StockNewsWires
20 Apr 15 18:20:09
$ARIA: Ariad Pharmaceuticals Given a $14.00 Price Target at BMO Capital ...: http://t.co/67A02t5Vqd
Penny Stockington
20 Apr 15 18:08:10
Members Saw Our Penny Stock Picks Gain 1600% In 4 Months! Subscribe Here For New Picks: http://t.co/2dBXHWiAWG $FASC $ARIA $TUCN
Capital Market Labs
20 Apr 15 18:03:09
$ARIA vs. $CBPO vs. $MACK Compared Across 9 Critical Measures http://t.co/HPbH8ksNVO http://t.co/LPVMAaFueT
Capital Market Labs
20 Apr 15 17:48:08
$NLNK vs. $INSY vs. $MACK vs. $ARIA Compared Across 9 Critical Measures http://t.co/UZiGNHz43k http://t.co/nH1ZnWGaoi
The Legacy News
20 Apr 15 16:57:24
Ariad Pharmaceuticals Given a $14.00 Price Target at BMO Capital Markets $ARIA http://t.co/uSXnKTKecX
Sam
20 Apr 15 16:29:07
A few more of interest: $AMBA $ADXS $AAL $AMGN $AMZN $ARIA $ARRY $ASHR http://t.co/bh923uwZvq http://t.co/MIJ2Vvynej
US Consumer News
20 Apr 15 16:28:39
Ariad Pharmaceuticals given $14.00 PT by BMO Capital Markets. buy rating. http://t.co/TAPTDviMq5 $ARIA #ARIA
Ticker Report
20 Apr 15 16:26:58
Ariad Pharmaceuticals PT Set at $14.00 by BMO Capital Markets $ARIA http://t.co/M8CNwm10Lz
Capital Market Labs
20 Apr 15 16:24:34
$FGEN vs. $IRWD vs. $ARIA vs. $HALO Compared Across 9 Critical Measures http://t.co/xTJgxDKcxW http://t.co/ndBaMYgjyV
Analyst Ratings
20 Apr 15 16:23:33
Ariad Pharmaceuticals given $14.00 PT by BMO Capital Markets. buy rating. http://t.co/sXMRszgJQf $ARIA #ARIA
InsiderTradingWire
20 Apr 15 16:15:06
$ARIA | ARIAD PHARMACEUTICALS INC is up 16% since we reported a Form 13D filing on 02/25/2015. Did you make ... - http://t.co/mP4sTTPsIx
V
20 Apr 15 16:03:53
RT @TipRanksFeed: 5-star analyst @JimBirchenough from BMO Capital reiterated a BUY on $ARIA. Jim has a 73% success rate http://t.co/HnqY3bf…
dailystockplays.com
20 Apr 15 15:55:10
NR4 ID http://t.co/YgZeHxj8b6 $XLF $SLB $CLF $OIH $NBR $SPLS $FITB $BRCM $CTRX $HZNP $CTSH $MDR $LPI $ARIA $BRCD $HCP $MHR $BBT
Capital Market Labs
20 Apr 15 15:29:34
$FGEN vs. $NLNK vs. $ARIA vs. $HALO Compared Across 9 Critical Measures http://t.co/7MO27v2K9L http://t.co/g2eaIr1m6n
Andira Bintang
20 Apr 15 15:12:05
#KCA #VoteJKT48ID TipRanksFeed: 5-star analyst JimBirchenough from BMO Capital reiterated a BUY on $ARIA. Jim has a 73% success rate #NASD…
TipRanks Live Feed
20 Apr 15 15:11:40
5-star analyst @JimBirchenough from BMO Capital reiterated a BUY on $ARIA. Jim has a 73% success rate http://t.co/HnqY3bfFVR #NASDAQ #stocks
Don H
20 Apr 15 13:42:25
RT @WallStJesus: TOP DROPS IN SHORTS: $PFE $ACT $GE $MACK $INTC $EBAY $EBAY $AMAT $URBN $C $HZNP $IDTI $HFC $ECA $KO $ARIA $CMCSA http://t.…
TV_Trading Ideas
20 Apr 15 12:49:56
ARIA collar over earnings $ARIA http://t.co/aT99Ekoof5
Jerremy Newsome
20 Apr 15 12:49:56
$ARIA chart: ARIA collar over earnings. http://t.co/wZKV5BXbRD
Capital Market Labs
20 Apr 15 12:44:33
$PDLI vs. $ARIA vs. $ACOR vs. $EBS Compared Across 9 Critical Measures http://t.co/aTXETSSTv2 http://t.co/fLXkd4wZgl
Alex Beatty
20 Apr 15 12:18:46
At aggresive doses, brigatinib appears active against brain metastases, a major route of crizotinib resistance #aacr15 $aria
Capital Market Labs
20 Apr 15 12:10:32
$EBS vs. $ARIA vs. $AEGR vs. $GHDX Compared Across 9 Critical Measures http://t.co/Po7p1uV6MU http://t.co/cQxID5eOKl
leahanne
20 Apr 15 12:07:03
Volume Alert - ARIA 9.03 Ariad Pharmaceuticals $ARIA Hit a high today of 9.14 Closing the day 12:03 at 9.03 +0 http://t.co/yE3FByQejo
leahanne
20 Apr 15 12:06:41
$ARIA Volume Alert - ARIA Stock 9.03 Ariad Pharmaceuticals $ARIA Hit a high today of 9.14 Closing the day 12:03 at 9 http://t.co/rbVtfmDujG
StockenheimerSchmidt
20 Apr 15 10:47:45
Platinum Members Saw Our Stock Alerts Gain Over 1600% In 4 Months! Subscribe Here: http://t.co/vy1bjusXoV $FASC $ARIA $TUCN
Stock Rocket
20 Apr 15 10:37:25
Our Stock Pick On $THCZ Is Up 481.54% From Our Initial Release! Major News: http://t.co/bLXWVUeOrx $FASC $ARIA $TUCN
Samuel Brown
20 Apr 15 10:34:09
$ARIA These Companies Probably Won't Be Acquiring Ariad Pharmaceuticals http://t.co/9ojGTO937q
SmallCaps
20 Apr 15 09:06:02
Review of Timothy Sykes book: An American Hedge Fund: http://t.co/AKjszqM28B $AMOT $ARIA $BDR $CAMT $CDZI $DGLY $FSI $INTT $MNDO $NVEE
Anthony DePaola
20 Apr 15 08:48:51
“@TheTradeXchange: $ARIA MAY 8 PUT SELLING 1K @$.20 on bid” M&A rumors in that name too. $ARIA
Mr. Trader
20 Apr 15 08:47:59
RT @TheTradeXchange: $ARIA MAY 8 PUT SELLING 1K @$.20 on bid
TradeXchange
20 Apr 15 08:47:52
$ARIA MAY 8 PUT SELLING 1K @$.20 on bid
cjboro
20 Apr 15 08:46:08
$APRI nice inside buy in february over 6M and nice biocompany as well by DENNER ALEXANDER J $APRI $VVUS $ARIA $BIIB http://t.co/yttarWmuiB
Quantcha
20 Apr 15 08:15:33
Covered Call Alert: ARIAD PHARMACEUTICALS $ARIA returning up to 35.14% through 21-Aug-2015 http://t.co/BfV8BU8rVK
stockschamp
20 Apr 15 07:44:03
This Guy Is Making Millions! Watch This Video Proof Here At http://t.co/8WvnrVmkBS .. $FASC $ARIA $TUCN
Michael Torres, PhD
20 Apr 15 07:20:09
RT @Biomaven: $ARIA Dramatic response rates (ORR>90%; CR 8.5% ) in most recent 35 pts (31 failed criz) in AP26113 ALK+ trial. http://t.co/A…
Roy Friedman
20 Apr 15 07:18:51
RT @Biomaven: $ARIA Dramatic response rates (ORR>90%; CR 8.5% ) in most recent 35 pts (31 failed criz) in AP26113 ALK+ trial. http://t.co/A…
				
				
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.