Talk about a comeback.

Ariad Pharmaceuticals (NASDAQ: ARIA) jumped 84% over the past two trading days after the European regulators said its leukemia drug Iclusig could stay on the market. And it was up a little more this morning before slipping into the red.

On its third-quarter conference call, management said they were expecting the drug to remain on the market after the EU's Pharmacovigilance Risk Assessment Committee gave the drug its backing. But considering how the news has been going for Ariad Pharmaceuticals lately, you can't really blame investors for being skeptical. Over the course of a month, Ariad announced that it had continued to see blood clots in patients taking Iclusig, stopped a trial in the first-line setting, and removed Iclusig from the U.S. market.

Iclusig remains off the market in the U.S. while the FDA and Ariad work out a plan to make it only available to patients where the benefit justifies the risk of blood clots. The drug was approved for use in patients who have failed Novartis' (NVS -1.28%) Gleevec or Bristol-Myers Squibb's (BMY -0.52%) Sprycel. At the very least, patients that are more susceptible to blood clots will be excluded. At the very worst, the FDA might not let Iclusig back on the market at all.

At Monday's closing price, investors seem to have completely discounting the possibility that Iclusig might not make it back. The stock was within striking distance of where it closed after the initial disclosure of the blood clots and well ahead of where it was before the announcement that the drug was being pulled from the market.

I think it's reasonable to assume that Iclusig will be back on the market. The FDA has a system in place -- called Elements to Assure Safe Use, which are part of the Risk Evaluation and Mitigation Strategies -- to help medicines get to the correct patients.

The exact restrictions will determine the potential market for Iclusig. Will it be used as a drug of last resort? Or only for patients with a certain mutation that makes Novartis' and Bristol-Myers Squibb's drugs not work? The latter is a fairly small market and probably doesn't justify the current valuation.

The timing is also very important. If the FDA wants an advisory committee meeting to help it make a decision, you can add a few more months to Iclusig's return to the market. If the FDA wants a clinical trial to help define the risk in the new population, you can add years to its return.

If everything goes right -- Iclusig is returned to the U.S. market in a few months with minimal restrictions -- Ariad Pharmaceuticals could likely be a buy at this point. But it's hard to predict what the FDA will do in this specific case, and the margin of safety is substantially diminished after the huge run over the last two days.

Of course, Ariad is still substantially below where it was before this all blew up. We'll have to wait until next year to see if it becomes the comeback of the year.