Small drug company Indevus (NASDAQ:IDEV) appears to have finally broken free from its rocky past. Formerly known as Interneuron Pharmaceuticals, the company has had its share of difficulties between its involvement with the infamous drug combo Fen-Phen to the return of Pagoclone by Pfizer (NYSE:PFE) in June 2002, which triggered a single-day 80% crash in its stock.
But the past is the past and Indevus has come a long way in recent years. While you may not know it from the lack of movement in the stock price, Indevus has had a very good week. This past Friday, the FDA gave the thumbs up to its drug Sanctura, which is now on the market for the treatment of overactive bladder. It was a bit odd that despite the great news the stock was down 4% on a whopping 13 million shares traded. More than 25% of the outstanding shares swapped hands on Friday and that's mind-boggling. Maybe approval was priced in or there were tons of folks selling on the news. Or maybe only the cancer drugs spike stocks on good news.
As I wrote back in April, Indevus was to receive a $120 million milestone payment from its marketing partner Pliva upon approval of Sanctura. Yesterday, the company announced that it has received the payment. I find it interesting that this slug of cash alone is about one-third of the company's market cap, yet the market's response to this expected announcement was again ho-hum as the stock was down another 4%.
From my perspective it's best to ignore the daily fluctuations and focus on the emergence of a company that is potentially on the verge of becoming a self-sustaining operation. Sanctura presents the opportunity to transition from a cash-burning R&D stage company to a fully integrated, profitable drug developer. I think the sales ramp for Sanctura over the coming quarters is certainly worth watching.
As a final thought, the Fools over on the Indevus board are itching to discuss the company's good fortune and their future prospects so go pay them a visit! Or check out the Biotechnology discussion board for thoughts on all things biotech.
Fool contributor Charly Travers does not own shares of any companies mentioned in this article.
