Shares of Diplomat Pharmacy Inc. plunged 35% in premarket trade toward a record low Thursday, after the independent specialty pharmacy's disappointing third-quarter results and slashed outlook prompted an analyst downgrade. The company said late Wednesday that softness in the hepatitis C business nationwide and direct-and-indirect renumeration (DIR) fees were the primary reasons for missing expectations. Leerink Partners's David Larsen cut his rating to market perform, after being at outperform for at least the last two years, and nearly halved his stock price target to $18 from $35. Larsen said he is concerned about "significant headwinds" from DIR fees and risk to negative revisions to inflation assumptions in 2017. The stock had already plummeted 35% year to date through Wednesday, while the SPDR S&P Pharmaceuticals ETF has tumbled 23% and the S&P 500 has gained 2.6%.
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