If you’ll recall, Dendreon (DNDN) recently won FDA approval for Provenge, its prostate cancer drug and as a result, the stock soared double digits for a few days straight. Amateur investors and pros alike made a decent chunk of change going long on the stock.
But not all FDA announcements go the right way.
Check out Intermune (ITMN).
Trading was halted around 1pm as the stock sat at $45.44, down 5.41%. The big news was FDA approval/denial of its new drug Pirfenidone, a drug intended to treat idiopathic pulmonary fibrosis.
Unfortunately for the longs, the FDA says another clinical trial will be necessary before the product can be brought to market. As a result, the stock is down 80% in afterhours trading to $9.25.
The FDA approval lottery cuts both ways.
Photo: Google Finance