) --Congratulations to the three winners of
FDA Drug Approval Contest. Each compiled impressive 10-1 records correctly predicting FDA drug approvals and rejections during the busy month of October.
: A professional healthcare investor (yes, he works at a hedge fund!) whose only miscue was incorrectly predicting an FDA delay for
Nuedexta. For compliance reasons, BioTrekker asked not to be identified by his real name.
: Also known as Matthew Wenzlick, a 21-year-old college student majoring in finance. Wenzlick has been trading stocks since January 2009 and has gradually shifted his focus towards the biotech sector. "Superrfly" didn't start off the contest so super, he got the
decision wrong at the top of October, but he was perfect after that.
Our third winner,
, remains behind a curtain. Joe didn't respond to my email informing him of his good fortune, so perhaps he's just shy. Joe may not want to be identified but I can still congratulate him for an almost-perfect drug approval prediction record. His only blemish was incorrectly predicting the rejection of
To quickly recap the contest, these three winners beat out 91 other contestants in correctly guessing the outcome of 11 FDA drug approval decisions in October. What's most impressive about BioTrekker, Superrfly and Joe is that they were among only a handful of contestants who correctly predicted the FDA's rejection of
( AMLN) diabetes drug Bydureon. To me, that decision was the biggest surprise of the month and it was the turning point for the contest.
Guessing right on the
approval or the rejections handed to
was fairly easy, but nailing the tough-to-call outcomes like Avanir and
showed true skill.
BioTrekker came oh-so close to running the table and being the sole contest winner because he tells me he was leaning positive on Avanir.
How did our winners manage to go 10-1?
"You have to do research independent of the companies and sell-side analysts," says BioTrekker. "Reading press releases is not due diligence. There is a lot of information to be found on the Internet. Use Google, but go beyond the first page of search results.
"Run down obscure things. A lot of drugs are old and repurposed. Management teams and companies often have histories they don't necessarily want you to know about. Be a skeptic," he adds.
Superrfly i.e. Wenzlick says he pays attention to whether a drug is unique and targets a large market. "While harder to obtain approval, the unique drugs seem to be the biggest moneymakers for investors."
Wenzlick also pays attention to a company's drug-approval track record. "Has the drug or the company been through the FDA before? Do they have approved drugs? Has the drug already received a complete response letter in the past," he adds.
Sitting right behind our three winners is a group of contestants with fantastic 9-2 records that also deserve praise.
PatrickM, BigHerm, IcyBling01, BarcaBoy, BioGuy, Walter, Tosincom, BioBelle and RJMCanoe -- congratulations, all!
The contest's booby prize goes to NS, who managed just two correct drug-approval predictions. Better luck next time, NS.
As for me, I finished with respectable but middle-of-the-pack 7-4 record. My biggest mistake was under-estimating the efficiency of the FDA. I guessed "no decision" for both Hospira and Alexza, thinking that FDA would have to kick some of these drug approval decisions down the road given the agency's heavy workload this month.
Turns out FDA did its job and either approved or rejected every drug in October. Perhaps that's the biggest surprise of the entire contest!
I'd like to extend a sincere thanks to all the readers who participated in the contest. I don't know if we learned anything, but I hope this was fun for those who entered or just watched from the sidelines.
If anyone has suggestions for future reader contests, please drop me an email or post a comment below this story.
--Written by Adam Feuerstein in Boston.
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Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;
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