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Avanir Pharmaceuticals ( AVNR)

Short interest: 27%
52-week high: $5.80
Current price: $2.86
Year-to-date performance relative to the Nasdaq Biotechnology Index: Down 30%

Shorts have been laughing uncontrollably over the slow, slow, slow launch of Avanir's Nuedexta for pseudobulbar affect (PBA).

Just like the five stages of grief, analysts and Avanir investors have come to accept that Nuedexta isn't the blockbuster drug they thought it was. Revenue forecasts have been whacked to such an extent that Avanir has a decent shot of meeting, if not beating, expectations for the third quarter.

The longer-term problem for Avanir is that its sales reps have to visit doctors multiple times before doctors are convinced to give Nuedexta a try in the few PBA patients they have. Marketing Nuedexta costs so much money that Avanir may never reach profitability.

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