Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) fell 14.77% Friday to $11.14 after Senator Bernie Sanders took to Twitter to scathingly accuse the company of price gouging for its leukemia drug.
Ariad traded a whopping 19.76 million shares on the day.
Bernard “Bernie” Sanders, the junior US Senator from Vermont and the longest-serving independent in US congressional history tweeted:
“Drug corporations’ greed is unbelievable. Ariad has raised the price of a leukemia drug to almost $199,000 a year.”
Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) market capitalization down $320 million
The tweet from Sanders dramatically erased $320 million from Ariad’s market capitalization.
Sanders quoted an article in Stat in his tweet which alleged that Ariad had embarked in recent months on a spree of price increases for its Iclusig treatment for chronic myeloid leukemia.
Stat said the company jacked up the price of the drug four times this year and twice last year, resulting in a cumulative 27% hike that took its price to $16,650 per month, or nearly $199,000 annually.
Drug makers have been at the receiving end of a barrage of criticism in recent times for predatory pricing. A tweet by Democratic presidential candidate Hillary Clinton denouncing “price gouging” crushed the Nasdaq Biotechnology Index last year.
She drew attention in her tweet to an article in the NYT highlighting the “gigantic overnight increase” in the price of Daraprim, a 62-year old drug for treating a life-threatening parasitic infection. Turing Pharmaceuticals allegedly raised the price per tablet of the drug from $13.50 to $750.
Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) had a solid Q2
For Q2, Ariad reported EPS of $0.56, which beat by $0.67, and revenue of $68.13 million, which beat by $7.49 million and was up 133%.
Net product revenue from sales of Iclusig was $65.3 million, up 134% year-on-year.
Analysts at SunTrust initiated coverage earlier this month with a Buy recommendation and a price target of $22. Last month, Leerink Partners initiated coverage with an Outperform rating and a price target of $20.
Technically, regardless of the Friday fracas, Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) remains in an uptrend.