~~~Breaking news~~~
Orexigen's (
OREX) stock surged 155% in post market trading after the advisory panel voted 13 to 7 for recommending Contrave's approval. Contrave is Orexigen's experimental diet pill currently in final stage review by the FDA. The agency is scheduled to announce the final call on Jan. 31, 2011. Keep in mind that, although it usually does, the drug regulator does not have to adhere to the panel's recommendation. After the unfavorable review of Arena Pharmaceuticals' Lorcaserin (Orexigen's close competitor),
it was recommended that Orexigen (OREX) would be a great buy.
What to do now?
SHORT the stock!!! Anticipate a 10-20% sell-off in the near future as investors scramble to cash out.
Just like Mela Sciences (MELA), the spectacular rise in OREX right now is the result of market overreaction, which almost always evaporates sooner or later. Want some examples? Take a look at AVNR, DNDN and SOMX!!!
Avanir Pharmaceuticals (AVNR)
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| Pre-approval run-up |
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| Post-approval drop (-19%) |
Dendreon Corp (DNDN)
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| Pre-approval run-up |
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| Post-approval drop (-31%) |
Somaxon Pharmaceuticals (SOMX)
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| Pre-approval run-up |
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| Post-approval drop (-70%) |
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