This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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!

Biotech Stock Mailbag: Spectrum Pharma

Stocks in this article: SPPI VVUS GNBT DNDN DSCO APPY ARNA

Last week, Discovery shares fell after the company released disappointing study results showing that its experimental drug Surfaxin failed to benefit children in acute respiratory failure.

Within days of that bad news, Discovery entered in a $35 million equity financing facility followed quickly by a $10 million stock offering at a steeply discounted price.

If you're unlucky enough to be a Discovery shareholder, you must be wondering what the hell is going on here? The "new" management team looks to be as incompetent and insensitive to shareholders as the old managers.

Discovery claims to be making progress with the FDA towards a first-quarter 2011 approval filing for the long-delayed Surfaxin as a treatment to prevent Respiratory Distress Syndrome in premature infants. What about Discovery inspires confidence that this goal can be achieved, especially considering the events of the past two weeks?

If and when Surfaxin is approved, I'd reconsider my bearish thesis in Discovery. Not one second sooner. If that means not catching the bottom, so be it. Too many investors have lost money thinking otherwise.


Joe A. writes, "Adam, what is your take on the recent delay from AspenBio Pharma (APPY)? How long of a setback do you think this could be?"

One benefit of being a stock commentator and not an investor is that I get to read and laugh at disastrous news updates like the one posted by AspenBio last week without wincing in pain as my stock portfolio takes a hit. I'm sorry if that's what happened to you, Joe, but Aspen is ripe for mocking.

Aspen is being forced to delay a re-filing of its FDA approval application for the AppyScore appendicitis test because of "unexplained variability in results from site to site in the initial draft of the statistical analysis report," the company announced on June 7. The results come from a just-completed AppyScore phase III study.

"Unexplained variability" isn't explained in great detail but let's assume that Aspen has discovered an unacceptable level of variability in the accuracy of the AppyScore appendicitis test across the hospitals where the study was conducted.

6 of 7

Select the service that is right for you!

COMPARE ALL SERVICES
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!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • 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