This Day On The Street
Continue to site
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

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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BMY $71.96 0.00%
AAPL $93.64 0.00%
FB $118.57 0.00%
GOOG $698.21 0.00%
TSLA $241.80 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs