NEW YORK ( TheStreet) -- The frothy biotech market has traders looking for new and earlier reasons to run stocks higher. For AP Pharma (APPA) and Delcath Systems (DCTH - Get Report), that means traders zeroing in on whether or not FDA will accept their respective drug review applications.
AP Pharma is developing APF530 to treat nausea and vomiting resulting from cancer chemotherapy. FDA rejected APF530 in March 2010, asking for among other things, a new study to assess the cardiac safety of the drug. With the clinical work finally completed, AP Pharma filed a new FDA approval application for APF530 on Sept. 28.
Under new rules established by recently passed federal legislation, FDA has 14 days to accept or reject a New Drug Application (NDA) after a previous Complete Response Letter (FDA jargon for a rejection.) That means AP Pharma should hear back from FDA regarding acceptance of the APF530 application by Friday, Oct. 12.
In a biotech bull market, this passes for a tradable catalyst. AP Pharma is a penny stock (shares closed Monday at 61 cents) making the trade even more irresistible.
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