Encysive Pharmaceuticals (ENCY) just announced the FDA has given it a third approvable letter for its pulmonary arterial hypertension treatment Thelin. The FDA has suggested more clinical data is required. More details will be available when Encysive hosts a conference call to discuss this at 8 AM Monday morning.
Worse yet for Encysive, Gilead (NASDAQ:GILD) received approval from the FDA for its drug Ambrisentan for the same indication. To be clear, the FDA will require strict conditions for prescribing Ambrisentan, but strict conditions are much better than not having access to the U.S. market.
After-hours trading in ENCY was actually halted about 5:45 pm EDT. The combination of the GILD approval and ENCY's 3rd approvable means the stock is in for a massive plunge Monday morning.
Long term it's difficult to say if sales of Thelin in Australia, Canada, and Europe will be viable, especially in the face of competition from Ambrisentan. ENCY may be a buying opportunity if it gets below $2 (which I think it will), but is definitely something to stay away from until the smoke clears from this.
ENCY vs. GILD 1-yr chart: