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What's Fueling Savient's Run?

Savient Pharmaceuticals (NASDAQOTH: SVNTQ  ) , already up 106% in August, has doubled again in September. What is fueling this run?

After getting pushed to the brink by creditor Tang Capital, Savient won in court against accusations of insolvency. Shares have since bounced back to where they were pre-brouhaha. Does this make the company a buy, though? Not unless you think sales of drug Krystexxa will increase significantly, as Savient is currently cutting its way to breakeven. analyst David Williamson refrains from investing in biotechs that stumble out of the gate, even if happy endings do occasionally result -- for instance, in the case of Human Genome Sciences' GlaxoSmithKline (NYSE: GSK  ) lifeboat. Far more often the result is continued wealth destruction, case in point being Dendreon's (NASDAQOTH: DNDNQ  ) recent poaching of Savient's former CEO. Dendreon shares are now worth roughly one-tenth of their high two years ago.

See more in the following video.

When it comes to a do-or-die business, the biotech industry takes the cake. Arena Pharmaceuticals is another recent success story in the industry after gaining FDA approval for its innovative obesity drug. However, while the future looks bright, there are still plenty of obstacles ahead for Arena. In our brand-new premium research report on Arena Pharmaceuticals, we walk investors through the must-know opportunities and threats facing the company. Since key news can develop quickly, we're also including a full year of updates for all who sign up. To learn more and get started, click here now.

Brenton Flynn and Dave Williamson have no positions in the stocks mentioned above. The Motley Fool owns shares of Dendreon and GlaxoSmithKline. Motley Fool newsletter services recommend GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 30, 2012, at 9:28 AM, earthunit wrote:

    In that so-called "great" report on ARNA that you want me to sign up for is the following statement, "rival pharmaceutical company VIVUS has a similar drug awaiting FDA approval."

    Now, knowing that VVUS' drug was ALREADY approved by the FDA, why in the world would I want that MF hot report? It has the most basic important fact WRONG!!

  • Report this Comment On October 01, 2012, at 7:53 AM, idahithat wrote:

    VVUS is waiting for FDA decision ? I wonder how that same drug will go over in the EU ?

    MOTLEY HELP WE NEED YOU </sarcasm off>

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