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Cramer said for every biotech stock like Celgene, there are a "hundred losers," and once they start losing like AMGN and DNA, it is time to cut bait. There are always only "two or three horses to be on," and these horses are currently CELG, GENZ and GILD, "because they have brought product portfolios." Cramer says although usually companies with only one product, like NFLD, are not good choices, he thinks a company like ONXX is a different case, because it has medication for liver cancer, a condition that has no other product, and Cramer compares ONXX to Celgene, which also started with only one medicine. Cramer would buy ONXX in calls with the "deep-in-the-money calls probably down $6 or $7 from where the stock is trading at." He warned a liver-toxicity issue could bring the stock down 50%. Cramer said there is no second-guessing the Food and Drug Administration, which was what he tried to do with CEPH two years ago. He confessed the best strategy would have been to wait until the drug was rejected and to buy when it was down, since the company had so many other drugs in the pipeline.
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