Biotech Awaits FDA Approval Today

A Big Day for a Small Biotech

Written by Brian Hicks
Posted April 30, 2010

Publisher's Note:  If you don't know Brian Hicks, you should. He's the President of Angel Publishing and the man responsible for bringing you Green Chip Stocks, as well as our sister publications Energy & Capital and Wealth Daily.

Today, as he often does, Brian has an investment story to share that's too important to pass up. It centers on the biotech sector, which is absolutely on fire as of late.

Specifically, he'll tell you about how to get ahead on companies with wonder drugs on the verge of FDA approval — the same way he helped investors get ahead of Dendreon (NASDAQ: DNDN), which ran up 187% on their way to approval for a prostate cancer vaccine.

Enjoy,

Nick

——————————

It's rare that a single day can make or break a company.

Sure, there are important days...

But on the day Apple released the iPad a few months back, they knew that even if it was a colossal failure, they weren't in danger of collapsing.

The day Toyota recalled thousands of their vehicles for faulty parts, they were able to withstand the hit they took both financially and publicity-wise, thanks to their huge market share.

And on the day Under Armor unveiled their first athletic shoe, it was a big risk — but one they knew they were in a position to absorb and still be a major sports apparel player.

Things aren't so safe and secure however when you're a small drug company betting the farm on a new product. TheStreet commented recently:

News of a drug's approval or rejection by the U.S. Food and Drug Administration can rock or kill a biotech's stock price.

And that's why today is such a big day for one U.S. company. Because today is the day they receive word from the FDA on whether or not their new arthritis drug will be approved.

Companies like the one in question spend years developing drugs like these. We're talking tens of millions of dollars on research, development, and testing. And all of it leads up to one big decision day.

Other industries don't have to stand up to the kind of scrutiny drug and biotech companies do. When Sony releases a new PlayStation model, they don't have to go before a federal review panel before it's allowed on the market...

This is of course with good reason. People absolutely need to know whether something they're putting in their bodies is safe and effective. It's the gamble these companies are forced to take — but it's a gamble that can pay off huge if they receive good news from the FDA.

Massive pharma firms like Pfizer, Merck, and GlaxoSmithKline have had their share of setbacks in the way of FDA rejections, but their wins far outweigh their losses and their market caps sit in the hundreds of billions... meaning they can take a hit and not even get knocked down.

The small drug firm awaiting their FDA ruling today sits at a market cap of around $350 million — a relative blip on the big pharma radar. But their revolutionary arthritis treatment stands to push them up in the ranks of major biotech players if it's approved.

Arthritis is one of the most widespread and painful afflictions in the world today. In the U.S. alone there's estimated to be 46 million sufferers.
And the arthritis drug market stands by itself as bigger than the asthma, osteoporosis, erectile dysfunction, multiple sclerosis, and antidepressant industries.

What it all adds up to is a huge market of people absolutely clamoring for a treatment with fewer side effects and more effectiveness.

That's what this company aims to deliver. And within hours we'll know if they'll get a chance to succeed.

But what if they don't get that chance? What if the FDA rejects their submission and sends them back to the drawing board?

Well consider the case of Xenoport, a drug company whose restless leg syndrome treatment was rejected by the FDA a couple months ago.

Within a two-week time span, Xenoport's value plummeted 68% from $20 a share to under $6.75. Absolutely crippling — not only to Xenoport, who is now struggling to climb back even partially from this setback, but to its shareholders who lost nearly 70% of their money when the FDA's bad news hit.

But what if there was a way as an investor to make money off these FDA decisions no matter which way they go?

That's right; whether a company wins or loses their review, what if you could walk away a winner?

Well my colleague Ian Cooper has actually come up with way to do just that.

When Ian managed to gain access to a confidential government database that actually tells him the precise date that FDA rulings will be held down, he knew that ability to exploit this information for big profits was too great.

But he also knew that gambling one way or the other on an FDA ruling was too risky. A 50/50 shot is fine for a huge multi-billion dollar corporation, but not for an investor operating with a small amount of money...

But now, with Ian's new strategy, that risk is gone. And all you need is the name of the company and the FDA decision date (who cares if it's a yes or no?) to make money.

Ian's drafted up a report detailing all this... but I'd recommend reading it immediately.

That's because his first pick is this small drug company whose arthritis drug will be ruled on today. Once that ruling comes in (which could be any minute now), expect to see a big move, one way or the other in the company's share price.

If you get in on time, either way that move goes, could make you some big profits.

You can access Ian's report right here. But as I said, there's not a moment to spare. We're expecting word from the FDA any time now.

It's a big day for this small company... here's a chance to make it a big day for you, too.

To Your Wealth,

Brian Hicks