NPS Pharmaceuticals Shares Popped: What You Need to Know (NPSP)

NPS Pharmaceuticals Shares Popped: What You Need to Know

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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 NPS Pharmaceuticals (Nasdaq: NPSP ) skyrocketed 30% higher in intraday trading Monday after the company announced a favorable drug study.

So what: The phase 3 study of its drug Gattex revealed favorable results for patients suffering from short bowel syndrome. The company plans to apply for U.S. approval for the drug in the second half of 2011.

Now what: The results are a huge boost for NPS, but be careful buying on jumps in pharmaceutical stocks. These stocks regularly hit our popped/plunged list, and bad news is just as likely as the good stuff is to hit them. I'm tentatively bullish today, but the company's long-term debt and continuing losses mean Gattex better perform very quickly for the stock to keep these gains.

Interested in more info on NPS Pharmaceuticals? Add it to your watchlist.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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