Savient Pharmaceuticals , 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.
Fool.com 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 (GSK 2.11%)lifeboat. Far more often the result is continued wealth destruction, case in point being Dendreon's recent poaching of Savient's former CEO. Dendreon shares are now worth roughly one-tenth of their high two years ago.
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