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With the slowdown of the world economy, investors should start looking elsewhere than the traditional technology stocks such as Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), and Microsoft (NASDAQ:MSFT) - stocks that are more economically sensitive. Biotechs, on the other hand, are less affected by the economy, but greatly depend on favorable FDA decisions to approve their latest drugs. Two upcoming drugs for FDA approval this week are Taltorvic and Horizant.

Tuesday, June 5: The FDA will decide on approval for Ariad's (NASDAQ:ARIA) and Merck's (NYSE:MRK) Taltorvic, a treatment for adult and pediatric patients with metastatic soft tissue sarcoma. This is the second time around for Taltorvic, it has already been rejected once by the FDA on March 20, 2012 in a 13-1 ruling against the drug. Although we cannot predict for certain what the FDA's ruling will be on Tuesday, it is more than likely that Taltorvic will be rejected again given its track record. This will not be good news for either Ariad or Merck.

Saturday, June 9: The FDA will decide on approval for Xenoport's (NASDAQ:XNPT) and GlaxoSmithKline's (NYSE:GSK) Horizant. The drug has already been approved for restless leg syndrome (RLS) and will be reviewed for treating postherpetic neuralgia this coming Saturday. Although Horizant was rejected by the FDA back in 2010 due to pancreatic acinar cell tumors found in rats during in vivo animal trials, the drug has since been changed to resolve this side effect leading to FDA approval for Horizant for RLS. It is likely that Horizant will be approved again for treating postherpetic neuralgia.

Bottom-line

The FDA will make approval decisions on Ariad's and Merck's Taltorvic and Xenoport's and GlaxoSmithKline's Horizant this week. Although we cannot predict the FDA's rulings for certain, it is likely Taltorvic will not be approved and Horizant will be approved given their respective track records.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 4 Speculative Biotech Trades In The Economic Downturn