The biotech industry is home to some of the biggest single-day gains investors will ever see. Consider Sarepta Therapeutics (NASDAQ:SRPT), whose shares soared 200% in a single day earlier this month following incredible phase 2 data for its muscular dystrophy drug eteplirsen. These types of moves can give investors an urge to jump in and join the party, but in many cases investors would be well-served to take a step back and resist any impulsive buying behavior. In Sarepta's case, the stock has trailed off nearly 40% since this incredible one-day gain, and while there's potential for an accelerated approval from the Food and Drug Administration for eteplirsen, it's not a done deal.
Investors have to be aware of some of the obstacles that face even the most impressive drug candidates, and in the following video, health care bureau chief Brenton Flynn runs through a few examples of what to watch out for.
Brenton Flynn has no positions in the stocks mentioned above. The Motley Fool owns shares of Dendreon. Motley Fool newsletter services recommend Vertex Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.