Why Navidea Biopharmaceuticals Inc. Shares Briefly Spiked Lower

Navidea shares head the wrong way after a thumbs-up from the FDA.

Jun 13, 2014 at 2:09PM

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 Navidea Biopharmaceuticals (NYSEMKT:NAVB), a developer of precision diagnostics and radiopharmaceutical agents that help physicians in staging cancer, plunged as much as 18% after announcing the expanded approval of Lymphoseek for use in head and neck cancers. Shares have since rebounded a bit and are now down a tamer 7% as of this writing.

So what: According to its mid-afternoon press release, Navidea announced that the Food and Drug Administration made Lymphoseek the first and only FDA-approved sentinel lymph node biopsy radiopharmaceutical agent for use in head and neck cancer patients with squamous cell carcinoma of the oral cavity. With this approval physicians will now have a new weapon of accurately mapping cancer-positive lymph nodes associated with oral cavity cancer, and it'll further expand Navidea's potential revenue stream. Navidea also has an additional supplemental new drug application for Lymphoseek under review by the FDA which could further expand its usage. The PDUFA decision date on that sNDA is Oct. 16, 2014.

Now what: "So if the news is positive, why did Navidea react so negatively?" That likely had to do with that fact that over the past three weeks its shares had rallied 39% in anticipation of an expected approval of its Lymphoseek sNDA. If you look at the rapid up and down spike on today's intraday chart just minutes after the release of the FDA's approval you'll get a picture-perfect example of what emotional trading looks like. While this news is a clear positive for Navidea, as I noted earlier this week it could be years before the company turns the corner to profitability. Though sales have been increasing, the initial ramp-up has been slower than I would have expected, leading me to believe that shareholders could be waiting a while before they have an opportunity to see sizable gains.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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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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