A brief roundup of stocks making news this morning...
Amarin Corporation (Nasdaq: AMRN) will become a topic of much discussion on Thursday as an announcement made by the company just after the market close on Wednesday stated the Division of Metabolism and Endocrinology Products (DMEP) within the U.S. FDA notified the company that a decision on reinstating the SPA for Vascepa in the ANCHOR indication would not be forthcoming on the 15th. The delay is not interpreted by Amarin officials as being a long way, based on its own ongoing discussions with DMEP, but investors are left to figure out what "not significant" means to Amarin and the FDA.
I go into more detail in an article posted over at Seeking Alpha today, but essentially what is "not significant" to the FDA may be more "significant" to investors awaiting the news - especially the traders who may consider the time it takes to watch a couple of episodes of "Cheers" as a significant amount of time in terms of a delay.
It's likely the FDA is just working through backlog after the holiday routine, but again, more of my take on this delay is in the SA piece. Amarin shares, which had gained nicely during intra-day trading on Wednesday, dropped by fiver percent in after-hours trading once the announcement hit the wires and were down by about that much during pre-market trading this morning.
Thursday is going to be a key day for CEL-SCI Corporation's (NYSEMKT: CVM) recent rally. Shares continued their move - which started earlier this week - during early trading on Wednesday, but tapered off after spiking towards the three dollar mark and closed on a relatively down note, aside from some trading that may be considered as 'painting the tape' into the close. Still, the numbers looked good as CVM registered another thirteen percent gain and it is possible that it was a case of simple profit-taking that resulted in Wednesday afternoons modest pullback after the rally. Other enthusiasts will believe that the drop was a matter of taking out stop losses and/or 'shaking the tree' before a move higher, but I'd go with profit taking on this one. Those sticking it out with CVM over the years have learned that it's a near necessity to take some profits during rallies such as this one because they always retreat in price.
That said, every time we see this, those following the Multikine story start thinking 'this could be the one.' Cel-Sci has been relatively mum over the years in providing trial updates and investors believe that if a positive update were to hit the wires, then shares could soar in a Dendreon-esque fashion. Multikine is undergoing world-wide testing for the indication of head and neck cancer, with the help of multiple partners around the world.
Because of the unknowns regarding the trial, the general street consensus is skeptical about positive progress and results at this point, and CVM's modest market cap is a testament that most investors are taking a 'wait and see' approach with this one. Many companies with products in the pipeline that could have the huge potential of Multikine - if successful - garner market caps of well over a hundred million, so if there were to be good news out at some point, then CVM would surely soar. That's what keeps long investors interested.
The problem is, the good news has been few and far between and shares quickly retreated after the recent 10-1 reverse stock split. That said, buying at those lows has already proven to become a decent quick trade and Thursday morning's trading will provide an indication of whether or not the quick trade can turn into more.
Intercept Pharmaceuticals (NASDAQ: ICPT) sent a tidal wave through the biotech and healthcare sector last week when positive results on a mid-stage liver disease trial sent shares rocketing skyward by the tune of nearly six hundred percent. Once the rally stalled, however, and the shorts came on board after the full results were said to contain some 'lipid abnormalities' and an increase in 'bad cholesterol,' shares quickly retreated, giving up about two hundred points of its gain. When you get pullbacks after those meteoric price spikes, its a given that the sharks and ambulance chasers will start circling and Intercept is not immune - headlines started making rounds on Wednesday afternoon that the lawyers want their cut, too, and are entertaining the idea of a class action against company executives who may have allegedly failed at their "fiduciary duties."
These suits are always weak, in my opinion. It's no secret that quick spikes like that one in any sector, let alone the speculative biotech sector, are most often followed by significant pullbacks as the profit-takers jet and the shorts come on in. That's why we rarely suggest that investors should chase a rally. These lawsuits fly like clockwork - every time - in these instances. We are the world's most-litigated society. The heck with sound investing and trading principles, let's just sue our way into prosperity!!!!
And we wonder why insurance is so expensive in America, and then we wonder again why services offered by those who have to buy insurance are so expensive.
Disclosure: Long CVM.
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