Combinatorx Could Move Either Way on FDA Review Wednesday

Although Combinatorx (CRXX) stock dropped 15% during early trading on Tuesday, a pop is likely if the FDA review of the company's pain medication, Exalgo, is positive.

That being said, the stock will drop to below $1 - in my opinion - if the review is negative; that makes it a bit risky if you're looking to get in now.

I'm staying away from CRXX right now - the company is not on sound financial footing and a buy now would be a gamble on the FDA's review Wednesday. If you do get in now, make sure it's on house money.

Another option is to wait until after the review to buy in. If the review is positive then the company would most likely take advantage of an increased share price by announcing a financing deal which would would then most probably lower the stock price again. That would be a good time to get in because you'd have a better idea about the success of Exalgo but you wouldn't be carrying the risk of a negative review.

Stand by your Due Diligence. I'll reconsider my opinion of CRXX if drops below a buck.

Disclosure: No position.

Comments

[Robert0713]

Too late. They are halted all day for the meeting.

2009 Sep 23 07:54 AM