My Centocor Experience
Marc, here is some unsolicited advice as if you need it from me. Some years ago Bob was on NBR and talked about Centocor as having a "blockbuster" drug for septic shock...I believe if memory serves me it was to combat the bacteria that forms when one goes into shock which is often deadly. So MrGreenJeans goes out and purchases a good sized portion of Centocor with what little money he had back then-not much by 90's standards-but hell it was significant to me at the time. Much like the stock you are talking about the Centocor trials had "good" reports leaking out from analysts and the company alike for months at a time. The reports were so good it was expected, by me along with others (at least I hope I had company), that this drug would be approved by the FDA later in the year. So what do you think happens?
You guessed it...the FDA disapproves the trial because of some invalid statistical reasoning in the results of the study, I believe Centocor based their projections about the drug on a subset within the sample they had taken which invalidated the study since they focused on a minute portion of the group instead of the whole group, and with that result the stock, can we all say in unison,...TANKED. I think my loss on the stock that year was $5,000 plus most of which occurred minutes after the FDA invalidated the trial.
The point I will try to stress to you is that with any drug there are vested interests trying to influence the FDA for approval but is really only the scientists, the people involved in the study, that really understand what is actually going on and even, as in this case, they try to stretch, at times, the results all in the name of present and future profits. Knowing what I know now, what makes good experience? bad judgement, I would have used puts under the stock to protect my now vaporized profits but real losses.
So my advice is in these situations results turn on a dime and protect your profits while they are there especially in biotech type drug trials. |
