When it comes to trading biotech and pharmaceutical stocks, there’s always reason to be careful – especially when the US FDA is set to decide.
You want to invest in the anticipation of potential news, and always look to sell prior to any news from the FDA for two reasons. One, we have no idea what the FDA could decide. And two, we can often see a sell the news reaction after a decision.
Some BioMarin Pharmaceuticals (BMRN) just learned that the hard way.
Just moments ago, BRMN plummeted nearly $40 a share from a high of $120.22.
All after the company received a Complete Response Letter (CRL) to the Company’s Biologics License Application (BLA) for valoctocogene roxaparvovec gene therapy for severe hemophilia A on August 18, 2020. The FDA issues a CRL to indicate that the review cycle for an application is complete and that the application is not ready for approval in its present form.
While BMRN may look attractive on the plunge, wait for the bad news to be fully priced in.
Then, keep an eye on it, as the company plans to meet with the FDA on next steps.
“We remain committed to the hemophilia community and to leading the way to the first ever gene therapy in hemophilia A,” said Jean-Jacques Bienaimé, Chairman and CEO. “We are surprised and disappointed that the FDA introduced new expectations for the first time in the Complete Response Letter. We are confident in valoctocogene roxaparvovec gene therapy and its potential to redefine the treatment paradigm for people with hemophilia A.”
Gilead (GILD) Fell $2.77 on US FDA Rejection
Gilead just announced its application for filgotinib, an investigational treatment for moderately to severely active rheumatoid arthritis (RA) was rejected. The company received a complete response letter (CRL) from the FDA that said the review cycle for an application is complete, but it’s not ready for approval in its current form.
“The FDA has requested data from the MANTA and MANTA-RAy studies before completing its review of the NDA. The MANTA and MANTA-RAy studies are designed to assess whether filgotinib has an impact on sperm parameters. The FDA also has expressed concerns regarding the overall benefit/risk profile of the filgotinib 200 mg dose,” says the company.
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