RE:Guidance is Still Valid-Needs to be RepeatedNot exactly right. Changes in guidance are not necessarily material within the meaning of securities laws. Many companies, like BCE for example, only issue guidance changes during quarterly disclosures. Guidance is just that, guidance, and it is covered under multiple disclaimers in disclosure.
If revenues dropped off a cliff or key customers were lost, those events might constitue events material enough to be disclosed immediately, but even then, materiality could be argued.
And no, just because a company doesn't issue a guidance warning between quarters or does not disclose any other material information it does not mean that those events have not occurred. You are assuming that every company is fully cognescent of securities laws and is well advised about disclosure but even in 2016, there are plenty of public companies that have problems because they "failed" to disclose material changes...
Having said that, big sell-side brokerages are still covering cxr obviously (30B$ raised), but negative headlines, the VRX mirroring trade, hedge fund shorts and debt holder hedging along with a hammering of all specialty pharma cos and treatment changes in US in favor of cheaper biosimilars are all headwinds.
As far as optics, the unfortunate decision to seek strategic alternatives, admittedly at a very bad time (usually perceived as an admission that there are major challenges) leads to further speculation that something worse will happen or be disclosed.
So clearly, the uncertainty, while not eaxctly akin to the drama at vrx, leaves the stock to trade like a leaf in the wind. A bunch of data - forex impact, potential UK and US drug formulary or HMO changes, bad press about CVS analyzing high % increases and removing certain drugs, the "we hate wall street" rhetoric also moving to "we hate gouging pkarma companies".
cxr claims it does not rely on the practice of jacking up prices of legacy treatments, yet as reported by bloomberg,
"Other drugs that CVS will exclude because of huge price increases include Nilandron and Dutoprol from Concordia ...
More and more small drug companies are basically putting a hyperinflation strategy in place, hoping no one will notice it,” said Troyen Brennan, CVS’s chief medical officer, in a telephone interview. “Our feeling was we needed to address those relatively specifically.”
If someone with pharma experience can comment on how much concordia's business model relies on these discrete price increases and the significance of these 2 drugs in the overall picture, pls do.
cxr Longs are rattled, understandably, maybe the strategic alternative is a change in leadership?