(Bloomberg) -- European health-care stocks are set to snap their longest winning streak since March 2010, dragged down by concerns over Novo Nordisk A/S’s upcoming third-quarter results and experimental drug updates from AstraZeneca Plc and Roche Holding AG.
The Stoxx 600 Health Care Index is down 6.1% so far in September, set to end ten straight months of gains. Novo Nordisk, AstraZeneca and Roche have contributed to roughly 90% of this month’s index declines, according to data compiled by Bloomberg.
Analysts at JPMorgan Chase & Co. last week flagged that Novo Nordisk’s third-quarter results in November may show slower-than-expected sales for its blockbuster weight-loss drug Wegovy. The shares are down 16% so far in September, on track for their biggest monthly drop since August 2016.
“While this current period has no doubt been a painful one, we think it’s short-term pain with the prospects of long-term gain remaining fully intact,” Barclays Plc analyst Emily Field wrote in a note to clients on Monday. She sees the third-quarter results as the “last bit of bad news” ahead of trial results for the Danish drugmaker’s experimental medicine CagriSema expected in December.
AstraZeneca shares have also been under pressure, down 12% in London this month — which would be the worst such decline since February 2009. That comes amid mixed results for its experimental drug with partner Daiichi Sankyo Co., and analyst concerns about the drug’s potential regulatory approval.
In Zurich, Roche shares fell this month after its closely-watched experimental obesity pill was tied to side effects, prompting questions about the drugmaker’s competitiveness in the hottest new pharmaceutical market. In addition to the pill, which works similarly to Novo Nordisk’s Wegovy shot, Roche presented data on an injectable medicine that’s closer to Eli Lilly & Co.’s Zepbound. Side effects on the shot were higher than expected but can be addressed, according to Bloomberg Intelligence. The stock is down by around 5% in September.
More broadly, investors have been shifting away from more defensive sectors and toward riskier areas, which has contributed to some of this month’s decline for health-care stocks.
“Short-term share price declines mean health-care businesses are more attractively valued,” said Rob Strachan, an investment analyst at Evenlode Investment. “Absolute valuations were already quite compelling for long-term investors.”
--With assistance from Sara Sjolin.
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