It's the binary news events -- clinical trial results and Food and Drug Administration approvals -- that make drug developers so fun to invest in, and so hard to stomach ... sometimes at the same time.
The FDA decision calendar is a little light this month, but there are still a few companies hoping for a heart-shaped "approved" letter in their mail box.
Medicine for more
Johnson & Johnson's
Patients in this subset make up only 10% to 20% of patients with bipolar disorder, but approval would be just the first step for J&J. The company has already submitted a marketing application for general bipolar disorder, which is scheduled to be acted on by the FDA later this year.
An approval seems pretty likely. The drug’s short-acting older sibling, Risperdal, is already approved to treat bipolar disorder, and unlike Eli Lilly's
Johnson & Johnson could certainly use the good news. Teva Pharmaceutical
Still waiting
While some drugs get responses around the time of their PDUFA dates – six to 10 months after submission -- it seems that an increasingly larger number of drugmakers are being asked to have a seat. Some are getting standard three-month delays; others are being given a more general when-we-get-around-to-it delay.
Eli Lilly and Theravance
Eli Lilly is also waiting, along with partner Amylin Pharmaceuticals
Amylin said it expects a decision "later this quarter." Given the FDA's track record, Amylin probably shouldn't be waiting for roses this month.
Approval equals stock pop?
When a drug's approval does come through, it can mean a pop for the company's stock price. But not always. Take tiny GTC Biotherapeutics. It got an approval last week for its anticlotting therapy Atryn and saw its shares fall more than 14%. The same inverted response happened to Onyx Pharmaceuticals
Guessing right about the FDA decision isn't good enough. It's important for investors to also factor in whether the approval is expected or not. This month especially it seems that the FDA decisions are widely expected to be in favor of approval, so if investors overreact and take profits, Fools should be ready to pounce on the stocks at bargain prices.