What Happened?
A number of stocks fell in the afternoon session after the April PPI report showed wholesale inflation accelerating to 6% annually, with service-sector prices rising at their fastest pace in four years.
Healthcare companies, drug makers, hospitals, and insurers, earn revenue from clinical services and product sales. While the sector is traditionally defensive, the hot PPI print creates a two-pronged headwind.
First, rising service-sector inflation (up 1.2% monthly) increases the operating costs for hospital systems and providers. Second, as inflation becomes a dominant political issue, drug companies' visible price-setting power makes them a primary target for regulatory intervention.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Research Tools & Consumables company Thermo Fisher (NYSE: TMO) fell 2.6%. Is now the time to buy Thermo Fisher? Access our full analysis report here, it’s free.
- Dental Equipment & Technology company Dentsply Sirona (NASDAQ: XRAY) fell 2.7%. Is now the time to buy Dentsply Sirona? Access our full analysis report here, it’s free.
- Branded Pharmaceuticals company Collegium Pharmaceutical (NASDAQ: COLL) fell 3.1%. Is now the time to buy Collegium Pharmaceutical? Access our full analysis report here, it’s free.
- Therapeutics company Halozyme Therapeutics (NASDAQ: HALO) fell 2.9%. Is now the time to buy Halozyme Therapeutics? Access our full analysis report here, it’s free.
Zooming In On Collegium Pharmaceutical (COLL)
Collegium Pharmaceutical’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 11.6% on the news that the company reported strong third-quarter 2025 financial results, beating analyst expectations and raising its full-year guidance.
The pharmaceutical company announced net revenue of $209.4 million, a 31.4% jump year on year that exceeded Wall Street forecasts. The strong performance was driven by its portfolio of pain management medications.
Following these results, Collegium lifted its financial outlook for the full year. The company raised its net revenue forecast to a range of $775 million to $785 million and its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) projection to between $460 million and $470 million.
Collegium Pharmaceutical is down 23% since the beginning of the year, and at $35.08 per share, it is trading 29.6% below its 52-week high of $49.84 from December 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Collegium Pharmaceutical’s shares 5 years ago would now be looking at an investment worth $1,614.
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