Falcon1 schreef op 17 juli 2014 07:43:
FDA APPROVAL and the Stock Markets
For example: Approval:
DNDN – Dendreon Corporation
April 13th, 2009: On news of the Phase III clinical trial of it’s prostate cancer drug (Provenge) being successful, Dendreon Corp’s (a leader in cancer drug research) stock price sky-rocketed from $7.30 to $18.85.
This represents an increase of 158% in just one day!
This would mean that if you had invested $100,000 in DNDN on April 12th, 2009, you would have had close to $258,000 the next day!
VNDA – Vanda Pharmaceuticals
May 7th, 2009: Vanda Pharmaceuticals Inc. announces the FDA approval of its schizophrenia drug, Fanapta. This caused the company’s stock to multiple nearly 8 times from $1.08 to $8.80.
That is an increase of just over 714%!
Again, this would mean that if you had invested $100,000 in VNDA on May 6th, 2009, you would have had over $814,000 the next day!
Words of Caution:
Not every drug that comes up for FDA review gets approved, which often leads to losses in multiples for that firm. In this case, you can also choose to short the stock before the FDA review decision.
As the old proverb goes, don’t put all your eggs in one basket. Diversify by also putting some money in safer investments.
Not every drug that gets approved causes the price of the tock to sky-rocket. It is possible that after approval, there might not be enough demand for the drug to warrant a surge in price.
Do your research about the drug, all the trial stages it goes through, and the company, before investing your money.
education.howthemarketworks.com/tradi...