We have had another busy start to the week in the biotechnology space, with a number of companies putting out fresh news – news that has translated to a shift in their respective market capitalizations. Here is a look at two of the week’s biggest movers so far and what is driving the action in each.

The companies in our cross hairs today are Horizon Pharma PLC (NASDAQ:HZNP) and TherapeuticsMD Inc (NYSEMKT:TXMD).

So, let’s kick things off with Horizon.

This one is an earnings-driven shift. At market open on Monday, the biotechnology company put out its first quarter 2017 earnings report and gave markets a business outlook (as is pretty standard in the space) alongside the release.

Analysts had forecast a release of just shy of $248 million in revenues for the quarter, with net income of $0.23 per share. The actual numbers came in at $0.21 per share and revenues of $220.9 million – not a dramatic miss, but a miss nonetheless. The EPS figure came in as lower than not only analyst expectations but also the same figure from a year earlier, while revenues increased on the comparable period.

if it was just these numbers that the company had reported, we would likely have seen a small dip followed by a recovery throughout the session. That wasn’t the case, however. Alongside the numbers, management also revised its 2017 guidance to a range of $1.00 billion to $1.035 billion from the previous range of $1.24 billion to $1.29 billion.

This discrepancy is rooted in the fact that the company has priced a number of its drugs too high in its primary care operations, and physicians are shifting away to lower-cost alternatives. The company is trying to offset this with a revised focus on orphan drugs, and to some degree, this is working, but there is a lag between the strategy pivot filtering through to topline and the primary-care revenues dissipating.

On the back of the news then, Horizon is down to the tune of 35% and currently trades for a market capitalization of $1.64 billion and $10.12 a share.

Moving on, let’s look at TherapeuticsMD.

This one is a not all that unexpected move, but the degree to which the company has sold off, and why, is noteworthy. TherapeuticsMD is trying to get a drug called X-004HR approved for the treatment of moderate-to-severe pain during intercourse. There is a new drug application (NDA) with the FDA right now, and recently, management indicated that it was expecting a complete response letter (CRL) from the agency related to certain deficiencies in the application. On Monday, we got confirmation of this CRL, and TherapeuticsMD took a hit on the news. The company closed down 10% on its daily open, with the magnitude of the decline primarily rooted in the response required by the FDA if the application is to be successful on resubmission. Specifically, the agency wants to see data from a long-term endometrial safety study; data that expands upon the 12 weeks studied as part of the initial investigation and application.

The problem here is that the company just doesn’t have the data that the FDA requires. If it was in hand, and it was just a case of resubmitting the NDA with the additional data included, there wouldn’t really be too much of a problem. Without it in hand, however, a fresh trial will be required, and TherapeuticsMD just doesn’t have the cash, time or resources to conduct said trial in its current iteration.

Management has said that it intends to appeal the agency’s decision and that there are a number of pathways along which the drug could move towards commercialization based on the current available data. As far as specifics go, however, there is not much on offer, and this presents something of a dilemma. If the company needs to carry out a fresh trial, it will need to raise cash, and this will be dilutive to shareholders. If it doesn’t conduct a fresh trial, the chances of the drug getting approved (based on the FDA response, at least) look slim; whatever management says.

There is a secondary asset in the pipeline and the company expects to submit a registration application for said asset by the third quarter of this year. As such, there may be some degree of recovery going forward. How long that recovery will take, however, and how much of the already priced in discount it will close, remains to be seen.