At almost the hallway point of the year, health care has been far and away the top performing sector.  However, that doesn’t mean that volatility has left the biotech portion of the industry. Here are three stocks that dominated the action in today’s trading session.

The Pop

Shares of Alexza Pharmaceuticals (Nasdaq: ALXA) soared 28% on news that it was resubmitting Adasuve for FDA approval. Efficacy was never the question for Adasuve -- the inhaled antipsychotic drug received a 17 to 1 vote from an advisory committee confirming its effectiveness. The red flag was always safety, as patients saw a decrease in lung function. Alexza insisted that the concerns in the CRL were “readily addressable,” and this swift resubmission is a testament to that.

If Adasuve is approved, it will face competition from injected treatments  like Eli Lilly's (NYSE: LLY) Zyprexa and Pfizer's Geodon, that may still be used first, depending on circumstances and labeling. And if it isn’t approved, investors should question whether Alexza management truly understands what it takes to bring this drug to market.

The Drop

It’s almost shocking to witness Arena Pharmaceuticals (Nasdaq: ARNA) posting a 15% decline, considering that the stock seemingly does nothing but go up. Shares are a five-bagger in 2012, including a whopping 62% increase in the last month alone. With a massive binary event looming large on June 27th -- the potential approval of obesity drug lorcaserin -- today’s sell-off is likely nothing more than sensible profit taking ahead of the weekend.

Investors in competitor VIVUS (Nasdaq: VVUS) will be watching what happens to lorcaserin with intense interest. VIVUS’ drug Qnexa’s date with the FDA was pushed back to later this summer, but an approval for Arena could indicate that the FDA has softened its stance, and send VIVUS shares higher, even though it would be second to market.

I want to caution investors who are not currently invested to stay away from Arena for the time being. Although an approval is considerably more likely than I would have guessed six months ago, lorcaserin is Arena’s only late stage drug, and a rejection would be devastating.

The Plunge

Today was not good for Theratechnologies (Nasdaq: THER) investors. Shares of the microcap plunged nearly 60% after giving a regulatory update on tesamorelin. The drug, which combats abdominal fat in HIV sufferers, had its European application for approval pulled by Theratech’s partner, Ferrer. Unlike the FDA, the EMA/CHMP allows companies to withdraw drugs if approval is known to be unlikely, before an outright rejection is issued. Celgene exercised that option with an expanded indication for Revlimid earlier this week. The company has indicated that it will not be EBITDA positive next year, and has withdrawn guidance for the time being. It seems challenging times are ahead for Theratechnologies.

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