BOSTON (TheStreet) -- This week's Biotech Stock Mailbag opens with a question from @Nixon786:

"Why is Xoma up 50% for the month?"

The spark that sent Xoma ( XOMA - Get Report) shares higher was the $40 million financing announced March 6. Normally, dilutive financings undertaken by money-losing biotech firms don't send stock prices higher. That's particularly true for companies like Xoma with a sad history of drug development futility.

What's different here is that Baker Bros., a well-respected and closely followed health-care hedge fund, bought half the Xoma deal. RA Capital, a Boston-based hedge fund, was also a buyer of Xoma shares in the offering, according to regulatory filings.

When Baker Bros. buys, other investors follow, especially when Baker Bros. buys big. The fund now owns about 20% of Xoma and I'm told will likely get a board seat. The fund tends to take large, long-term positions in drug and biotech companies it likes, including Seattle Genetics ( SGEN), Incyte ( INCY) and Viropharma ( VPHM).

The question you're probably asking now is, "Wait a second -- Xoma? What the hell can Baker Bros. see in Xoma?" I wondered the same thing.

Xoma is apparently getting a new lease on life, thanks to a top-to-bottom restructuring -- a new CEO and chief medical officer, cost cutting and a new business model. Xoma is still developing the same lead drug XOMA 052 (given a new name, gevokizumab) but money-wasting efforts in diabetes and cardiovascular indications have been shelved in favor of clinical trials for Behcets uveitis and non-infectious uveitis -- both diseases of the eye.

A phase III study of gevokizumab is expected to start this summer with data likely available by the end of 2013.

Whether Xoma succeeds with gevokizumab and breaks a three-decade-long streak of internal drug development failures is still an open question, but what's different today is that the company has some big-name investor support.

Owen S. asks: "What are your predictions for the FDA drug approvals next week involving MAP Pharmaceuticals ( MAPP), Affymax ( AFFY) and Chelsea Therapeutics ( CHTP). And how do your predictions match up with investors you talk with on Wall Street?"

Indeed, it is a big week for FDA drug approval decisions starting Monday. My stated predictions, according to my entry in TheStreet's FDA Drug Approval Contest are:

Monday: MAP Pharma (Levadex for migraine) -- Rejection

Tuesday: Affymax (peginesatide for anemia) -- Approval

Wednesday: Chelsea Therapeutics (Northera for low blood pressure) -- Rejection

One note: If I could amend my predictions, I would switch Chelsea to "approval." After the positive panel vote in late February, I feel like Chelsea has a decent shot. At worst, FDA may "softly" reject the drug, meaning approval would be delayed for a relatively short time and wouldn't require significant new clinical data.

Chelsea's stock is not trading like Northera approval is in the bag, which gibes with the more skeptical view I hear from some of my buy-side investor sources. However, I feel like the company made a strong case for approval at the recent advisory panel, and I'm OK with being contrarian.

MAP is probably the most controversial of the three. The active ingredient in Levadex is DHE, a drug already approved to treat migraine in other formulations. Levadex, however, is an inhaled version of DHE and the track record for inhaled drugs going in front of FDA is very spotty.

The efficacy and safety data shared by MAP with investors looks good but that doesn't mean FDA is satisfied. It's hard to say if regulators will have concerns with either the manufacturing or safety of Levadex, especially since it's part-drug, part-medical-device.

MAP hasn't exactly been projecting confidence in Levadex approval either. The company decided not to pre-build inventory prior to hearing from FDA; and the filing of its most recent 10-K was delayed last week for what the company claims is an accounting issue.

Then there's the mystery of the Special Protocol Assessment (SPA) for the sole phase III study conducted with Levadex. In the past, MAP claimed that FDA granted an SPA for the Levadex study, but more recently the company said that FDA had no record of an SPA. Weird.

I tried to get an explanation from MAP about the "missing" SPA but company executives declined to speak so close to the FDA's decision date.

MAP is definitely a toss-up. I can see it going either way. It's very difficult to predict.

Of the three, I'd say Affymax is the easiest pick. I'll be really surprised if peginesatide isn't approved. I think most investors feel the same way.

Speaking of investor sentiment, let me run down the predictions for all the reader contestants in my FDA Drug Approval Contest:

MAP: 37% predict approval; 59% rejection; 4% no decision.

Affymax: 68% predict approval; 22% rejection; 10% no decision.

Chelsea: 53% approval; 43% rejection; 4% no decision.

A single contestant -- a biotech trader living in Texas who goes by the nickname "CBH" -- has a perfect 9-0 record in the contest so far. CBH predicts rejections for MAP's Levadex and Chelsea's Northera, and an approval for Affymax's peginesatide.

@Bullbear123 "@adamfeuerstin $TLON you were wrong again."

I was wrong about Talon Therapeutics ( TLON). I didn't think the company would be capable of getting a positive vote for its leukemia drug Marqibo from Wednesday's FDA advisory pane. But that's what happened, even if the 7-4 vote (with two abstentions) in favor of Marqibo wasn't exactly a ringing endorsement.

I put abstentions in the "no" bucket, so the real vote was more like 7-6 recommending Marqibo's approval, which is even a weaker signal of support.

The FDA drug approval decision date for Marqibo is May 13.

To Talon's credit, the company did a nice job Wednesday framing Marqibo as a benefit for leukemia patients with no other medical options. Having Dr. Sue O'Brien, a respected oncologist from M.D. Anderson Cancer Center, advocating for Marqibo definitely helped sway some panel member votes. Smart strategy, Talon.

Working against Talon is Marqibo's "meh" efficacy, which was noted even by panel members who voted in favor of the drug. I didn't hear a single panel member effusively praise the drug. Most of the explanations for "yes" votes Wednesday were along the lines of, "Well, these patients are really sick, Marqibo may help them but probably won't hurt so I'll vote to recommend approval."

Talon was open for trading during the panel and the shares went as high as $1.10 before the final vote count was announced. But the stock's gains quickly evaporated with Talon closing Wednesday up 7 cents to 81 cents a share. As I write this column on Thursday, Talon is down 6 cents to 75 cents.

Talon trades on the bulletin boards so it's going to be a volatile stock, but tweets of biotech traders Wednesday suggested few were willing to guarantee Marqibo's ultimate approval with any degree of confidence. If Talon is your kind of stock, I'd say trade carefully.

--Written by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.