July: A Biotech Trader’s Month
If you have any comments, questions, or
thoughts on this article or on anything to do on biotechnology or medical
technology feel free to email me at prugg@tradingmarkets.com.
The month of July is revealing itself to be a very enticing month for
traders, with many near-term trading opportunities on the biotech horizon. We can definitely thank the FDA and its different advisory committees for
their parts in serving up many of these opportunities over the next several
weeks. In addition, several medical
meetings will also give traders the opening they need to take advantage of news-generated movements in some very high-profile biotech companies. Â
As I mentioned in earlier articles, the FDA is the final judge in
deciding whether or not a new drug will get to market and generate revenue. Many a company’s future potential earnings also
hinge on the decisions
made by advisory committee members on drugs up for approval during scheduled
meetings. Â
July just happens to be a
month that is peppered with many advisory committee meetings that will either
reward or punish investors. As
these meetings get close, I will continue to update you on the specifics of the
agendas with my FDA Alerts. In
addition, I will continue to present you with insight as to which way the FDA
may be leaning, before the actual meeting occurs.Â
During the month of July, a company called Ortec International
(
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PowerRating) will make its case for its new product to accelerate skin formation at the donor
site when a burn patient has to undergo a skin graft. The company also hopes to greatly expand the market for its product by
applying it to treat ulcers experienced by diabetic patients. This company has one very key factor in its favor going into the meeting
with FDA and look for me to uncover this in my upcoming FDA Alert.Â
Medtronics
(
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PowerRating) and Guidant Corporation
(
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PowerRating), two giants in the medical
device industry, will be simultaneously maneuvering for the FDA’s attention in
July. Both companies have
implantable devices up for approval to treat congestive heart failure, a growing
market in the elderly population. These
devices herald a new way to treat this difficult disease and whoever strikes
first will have the edge. Interestingly
enough, the FDA will look at both devices at the same time during their
scheduled July meeting.
Two other biotech companies will get their shot at the FDA this month and
the stakes, for both, are very high. Amylin
Pharmaceuticals
(
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PowerRating) is anxiously awaiting its meeting with the FDA concerning
its oral drug to treat diabetes. In
addition, Aviron
(
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PowerRating) will hold its breath this month while the FDA makes a
decision on its new nasal flu vaccine. Aviron
is banking on its approval just in time for the 2001 ‘flu season and hopes its
advantages over what is currently on the market will immediately grab market
share.
Along with the FDA, July offers several medical meetings that will
highlight some very high profile companies and provide an opportunity for
traders to be in on some stock movement. Look
for these meetings and the companies that may be affected, in my upcoming Medical
Meeting Alerts.   Â
I have been
investing/trading in medical and biotechnology stocks for years. The one common
theme is that this is a high risk/reward endeavor. When you are correct, many
times you are richly rewarded. When you are wrong, you can be badly punished.
Please keep this in mind and hedge/protect yourself appropriately when
trading/investing in these stocks.