This year started off with a bang in the health-care sector. There were so many soaring stocks that our weekly list of humongous health-care stocks omits plenty of double-digit gainers. We have to draw the line somewhere, though, so here are three of the strongest health-care performers of the first week of the new year.
Pompe it up
Amicus Therapeutics shares skyrocketed 37% this week. The company announced positive results from its phase 2 study of duvoglustat HCl administered with enzyme replacement therapy in the treatment of Pompe disease.
Some investors appeared to have anticipated the good news. Shares for Amicus began climbing earlier in the week and were already up 26% before the announcement.
2013 is already being kinder to Amicus than last year was. The company and its partner GlaxoSmithKline announced disappointing results in December from a phase 3 study of migalastat HCl in treating Fabry disease. Shares plunged on that bad news and still have a long way to go to regain previous highs, even with this week's positive results from duvoglustat.
Controversy continued for Herbalife this week, but so did the stock's comeback. Shares climbed more than 23% for the week.
Two weeks ago, the company made our list of horrendous health-care stocks after hedge fund manager Bill Ackman announced his $1 billion short sale of Herbalife shares. One week later, though, Herbalife shares bounced after the company mounted an aggressive counterattack.
Another investment manager weighed in this week. Robert Chapman of Chapman Capital stated that he has a "monster long bet" on Herbalife. Chapman challenged Ackman's negative outlook for the company and suggested that Ackman would "suffer a merciless short squeeze."
We'll get to watch the next twist in this story next week, as Herbalife hosts an investor day to rebut Ackman's allegations. Regardless of who is right, this is one entertaining investing story.
Shares of Sarepta Therapeutics jumped 21% this week. Were there any exciting announcements from the company? Any analyst upgrades? No and no.
Some might attribute the increase to a positive prediction for Sarepta in 2013 from The Street's Adam Feuerstein on Jan. 2. Although Sarepta moved up at the market open, the stock closed that day less than 2% higher over the prior business day. Also, shares were already up 8% for the week before the article's publication.
I think the most likely explanation for the nice gains this week is that investors believe two things. First, many are probably banking on success for Sarepta with a potential regulatory filing for eteplirsen in treating Duchenne muscular dystrophy later in 2013. Second, the stock was down 25% since hitting highs in late November. Many investors seem to have thought the price was right to buy.
Most likely to succeed
Of this week's humongous performers, which has the best odds to be a big winner in 2013? Amicus faces an uphill battle in overcoming the disappointment from the phase 3 results for migalastat. There's no telling what the outcome will be in the Herbalife soap opera.
My pick is Sarepta. Although there is no sure thing in the biotech world, I like the company's chances with eteplirsen. We'll see if the humongous first week of 2013 for this stock leads to a humongous year.
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