Ariad (ARIA) had poor October performance because of government scrutiny from Senator Bernie Sanders and Rep. Elijah Cummings.
Many felt Ariad would be forced to lower prices for P/R reasons or find itself suffering the same fate as firms like Valeant (VRX) or Mylan (MYL) - price hikes were the first breadcrumb on a trail into more controversy.
Increasing the price of a life-saving drug is a good motivator for lawmakers to look closer, and I don't think it is a coincidence that whenever pharmaceutical companies/managers gain attention for price 'gouging' they often find themselves on the hook for often unrelated lawsuits.
In Ariad's case, Sanders and Cummings issued an open letter to the firm asking for more information. They seemed to be suggesting problems with the way the firm was dosing Iclusig: allegedly raising the price while decreasing the dose, discontinuing a smaller does to force customers to buy a larger one.
However, all this appears to have blown over. The threat of a Martin Shkreli, Valeant or Mylan style controversy seems to be averted. I don't think they found any skeletons in Ariad's closet.
In addition, several bullish catalysts have emerged, completely defraying the company's losses during that month: The election of Donald Trump and progress with the FDA.
Catalysts
1. Trump
The election of Donald Trump to the U.S presidency was seen as a breath of fresh air for many in the pharmaceutical industry.
Hillary had favored increasing regulations on the sector in the wake of the high-profile price gouging controversies. Also, Hillary would have been pressured to regulate to placate her left-leaning base -many of whom were angry about her victory over Bernie Sanders in the primaries.
The truth is, Trump does not strike me as overly laissez-faire, but the market thinks he is
