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
TheStreet Open House

Biotech Stock Mailbag: Clinical Data, Mannkind and Thanks!

Stocks in this article: CLDA MNKD DEPO DCTH PFE ABT

This investor accuses me of purposefully withholding information about Kirk and his involvement with Clinical Data because of a personal grudge and/or past articles I wrote about New River. He points to this 2007 article about New River's attention deficit disorder drug Vyvanse, specifically.

"You didn't tell the reader you had done this before with a Kirk company with very bad results for you, or even that Kirk had a very successful history developing drugs. You talk about Clinical Data in a vacuum. Honestly, this seems like anything but full disclosure to the reader…"

Kirk's deal to sell New River to Shire was genius, although Vyvanse, under Shire's control, did not meet initial sales expectations, so call me right on the drug, wrong on the stock. Kirk's business resume, however, wasn't relevant to the story I was telling in my column -- the bear thesis on vilazodone as explained by someone with a short position in Clinical Data.

The vilazodone column doesn't ignore the positives, as this long investor contends. In fact, the column states very clearly the "positive" clinical data from the drug's two phase III studies. What's sorely lacking most places these days, and which my column accomplishes, is present an alternative interpretation of the vilazodone data in the public domain that happens to be more skeptical.

Investors have no problem finding the bull story on stocks and Clinical Data is no exception, judging by the recent onslaught of Seeking Alpha articles and blog posts all extolling the vilazodone's virtues. But why wouldn't a fully informed investor also want to know about the downside, the risks, the potential negatives? Due diligence isn't diligent without understanding a stock's bull and bear thesis.

The FDA is expected to announce an approval decision for vilazodone on Jan. 22, 2011.


Via Twitter, @Superduty03 asks, "Are you ever an optimist?"

The simple answer is "not very often."

You need to understand that I'm a journalist, which means skepticism, even cynicism, is an integral part of my DNA. I see the glass half empty. I question everything and everyone, especially biotech executives. My motto: Mistrust AND Verify. Biotech investors are generally well served by skepticism. We all know the high failure rate in the sector and the hyperbole tossed around about LIFE-SAVING MEDICAL ADVANCES that usually accompanies even the most mundane announcements.

Ask anyone who knows me personally and they'll tell you that I'm a cheerful, happy and outgoing guy. When it comes to my professional life writing about biotech stocks, however, I set a very high bar for optimism and cheerfulness. In biotech investing, optimism is usually a good way to lose money.


3 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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 17,654.52 -18.08 -0.10%
S&P 500 2,052.74 +0.92 0.04%
NASDAQ 4,763.6120 +5.7330 0.12%

Partners Compare Online Brokers

Free Reports

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