ARNA Ad Comm success

ARNA has just won a vote in favour of approving lorcaserin, its anti-obesity pill, from an advisory committee meeting. Very supportive voting with 18 of the 23 member committee voting that the company had demonstrated that the drug’s benefits outweighed its potential risks when used long term in overweight and obese people.

We can expect a significant spike in ARNA based on this news. VVUS’ price essentially doubled in the immediate aftermath of its positive Ad Comm meeting in February. I would not expect ARNA to behave quite so aggressively as it has alreay seen considerable upside running into the meeting.

As mentioned in a previous post, I tend to look for an entry about 15 days ahead of an Ad Comm meeting. 15 days ago ARNA closed at $2.27. Yesterday it closed at $3.66 – a 61% increase in 3 weeks. 

I may take a position in this between now and the PDUFA date (June 27th) but if it gaps up significantly tomorrow then I will certainly wait for a pull-back to do so.

Couple of things

I am out of PGNX. Sold what was left of my original position yesterday at the open – negative news and poor general market sentiment convinced me to exit. I will probably get into this again ahead of the now delayed PDUFA.I am now all cash and sitting on my hands until I find something compelling.

I have an article at SeekingAlpha outlining some data on the performance of the recent selling approvals (AFFY, VVUS and PLX). This is a follow-on to an earlier review of this strategy starting in January 2011.

 

 

Another tough session

Wow – what a brutal day! April job numbers were insipid and the market’s reaction was harsh. Great time to be watching from the sidelines. NASDAQ and Biotech Indices were both down >2%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hopefully this weakness will set up some good buying opportunities ahead of the upcoming June catalysts.

ALXA dinged

ALXA received a CRL from the FDA this evening for its schizophrenia drug, Adasuve. The decision appears to be related to manufacturing issues. Too bad, I was looking forward to another news shorting opportunity!

PLX puts

As I expected PLX opened with a decent gap up. I think it traded as high as $8 in the pre-market. I bought some May $7.50 puts (4% of NAV) first thing and got in for $70 per contract. So far this is working out quite well with the stock down to ~$7 from an open of $7.69. The last price on the options is currently $100 per contract (so up 43%).

PLX approval

Protalix’s drug, Eyelea, was approved after hours this afternoon for Gaucher’s Disease. I wrote a bullish note about it here. Of course I off-loaded my position in early April at $6.38 and missed the move later in the month into the $7s. It closed today at $6.19 after dipping as low as $5.80. In AH trading it is back in the high $7s. I will be looking to take a short position on this tomorrow.