Unkind Cut at Encysive

Ultimately, Given said he hopes to resolve the FDA's concerns when he meets with the agency over the next 30 days and remains just as optimistic that Thelin will soon hit the U.S. market -- without further clinical work -- as he was in March.

But some analysts have been steering investors away from Encysive and toward Myogen in the meantime. Take Geoffrey Meacham of JPMorgan, for example. Already a Myogen bull, Meacham predicted on Monday that the company's own PAH drug -- known as Ambrisentan -- will beat Thelin to the market and start racking up significant sales beginning next year. By 2010, he looks for Ambrisentan to hit peak sales of $600 million. He now sees Thelin generating just one-eighth of that amount.

Meacham's firm counts Myogen and Encysive as investment banking clients and owns stock in both companies. His firm lists itself as a "major shareholder" of Myogen.

Robert Lawton, vice president of Source Capital, has by now exited positions in both stocks. Previously, he had a large short position in Myogen -- which he cashed in ahead of this week's run-up -- and a small long position in Encysive that had started to make him feel nervous.

"I felt that the stock wasn't acting right going into the FDA decision," Lawton explained. "I truly feel sorry for the shareholders. In light of the recent European Union approval, this second FDA request was difficult to anticipate and must be heartbreaking for them."

But Given, for one, continues to hope for a hard-fought victory in the end.

He compared the current situation to being "first and goal on the 1-yard line. You're not in," he said. "But it's not a bad place to be."

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