This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Gambling on American Pharma Partners

But in response to questions, Carter also acknowledged that the FDA may simply view Abraxane as a reformulation of Taxol, which would make approval more likely because the regulatory requirements would be less stringent. Furthermore, Carter conceded that the FDA would have likely rejected the Abraxane application already if the agency viewed the drug as something more complex than a simple Taxol reformulation.

One manager of a $400 million mutual fund who is long American Pharmaceuticals seized on this last point. "If the FDA had wanted a full-fledged NDA new drug application , they would have asked for one by now," he said. The source requested anonymity because his firm doesn't allow money managers to discuss individual stocks in their portfolio.

It should be noted, too, that the FDA didn't bring Abraxane in front of an advisory panel meeting. Such a venue is often used by the agency to vet drugs with which it has issues or problems.

Abraxane bears, on the other hand, were making hay with Carter's initial negative comments to press their case on why the FDA will turn the drug away. Generally speaking, short-sellers of American Pharmaceutical shares have long believed that the Abraxane data sent to the FDA are flawed, including problems with patient enrollment in the phase III clinical trial, Abraxane's dose levels, and surprisingly poor Taxol response rates in the study.

Skeptics also point to past comments made by American Pharmaceutical executives, who at various public forums have described Abraxane as a new delivery mechanism for Taxol.

A hedge fund manager, also asking for anonymity, isn't covering his American Pharmaceuticals short, despite the stock's recent strength. "Nothing I've heard in recent days changes my mind: The FDA won't approve Abraxane," he forecast.

But not all Abraxane bears are so confident. Another hedge fund manager, who also asked for anonymity, said he covered his short position in American Pharmaceuticals in October, when the stock was trading in the mid-$20s. At that level, American Pharmaceuticals would not have sunk more than another two or three dollars if Abraxane had been rejected because of a valuation floor set by the drugmakers' base generic-drug business, he explained. But if Abraxane had been approved, the stock easily could have doubled or more.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs