Why POZEN Inc. Shares Were Slammed

POZEN shares hit the sales rack after receiving unwelcome news from the Food and Drug Administration. Find out why this may not be as bad as it appears on the surface.

Apr 28, 2014 at 2:54PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of POZEN (NASDAQ:POZN), a biopharmaceutical company developing therapies focused on treating acute and chronic pain, tumbled as much as 28% earlier in the trading session after receiving a complete response letter from the Food and Drug Administration in response to its new drug application for PA8140/PA32540.

So what: According to POZEN's press release, it received the CRL (a rejection letter from the FDA) for PA8140/PA32540, a secondary prevention treatment of cardiovascular disease for patients at high risk of developing aspirin-induced gastric ulcers, because of deficiencies at a third-party supplier of an active ingredient used in its drug. As the release notes, "Satisfactory resolution of deficiencies noted by the field investigator is required before the NDA may be approved." Most importantly, however, no clinical or safety deficiencies were noted with respect to either the 81 mg or 325 mg dosage.

Now what: While shareholders are plainly not happy with today's CRL, I would point out that the drug appears to be safe and effective at meeting its efficacy endpoint. What the real question is that shareholders should be asking is how serious these deficiencies are and how long they will take to fix. It appears shareholders may have a better answer to these questions when the company reports its quarterly results on May 8.

If you're a current shareholder I might be a bit disappointed today, but I would suggest not giving up so easily. POZEN has a globally successful U.S. partner in Sanofi (NYSE:SNY) for its experimental drug, and a therapy that tested strongly in late-stage studies. Furthermore, with peak sales potential of $400 million (a direct figure pulled from a POZEN presentation last April), there could be significant upside left in shares once this issue is resolved with the company valued at just $250 million as of this writing.

POZEN shares may offer world's of potential, but over the long run its possible gains could pale in comparison to this top stock
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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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