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Shares of Amarin (AMRN -11.8%) and Horizon Pharma (HZNP -17.4%) sank after each received FDA...

Shares of Amarin (AMRN -11.8%) and Horizon Pharma (HZNP -17.4%) sank after each received FDA approval of key drugs. Buying the rumor and selling the news? In the case of AMRN's Vascepa, investors are still waiting for New Chemical Entity status to make sure there isn’t a generic competitor. For HZNP, investors may doubt its ability to market its Rayos rheumatoid arthritis treatment.
Comments (10)
  • Ericbo
    , contributor
    Comments (45) | Send Message
     
    Based on a recommendation I saw on Seeking Alpha, I put in a sell order last night for when the market opened (at the market price). It was a great move. My shares sold at the highest point, and then it was downhill for most of the day. However, I'm thinking about buying shares again in anticipation of NCE status and a potential buyout by a larger suitor. I still haven't made up my mind about doing that. Takes some balls to do that lol. Thanks to a Seeking Alpha contributor for helping me think through what to do on this one. My decision was right this time!
    27 Jul 2012, 06:10 PM Reply Like
  • mitrado
    , contributor
    Comments (1948) | Send Message
     
    You know that was pure luck, right? $AMRN was at $14 in pre-market... and 2 minutes before the open it was at $15.8.

     

    Anyway, I hope this sell-off is done cause after all I've read, I see no reason for this drop (other than short-selling games.)
    27 Jul 2012, 08:55 PM Reply Like
  • Ericbo
    , contributor
    Comments (45) | Send Message
     
    Not totally luck, but admittedly luck entered in. Putting in the sell order was a calculated decision and action. Had I not taken that action, it would have been a loss. You win some, you lose some. This time I was lucky enough to win. Plus, my action paid off.
    28 Jul 2012, 11:28 AM Reply Like
  • William LeGro
    , contributor
    Comments (108) | Send Message
     
    There is indeed no sense in what happened to AMRN and HZNP except shorting, and it was on a scale that reeks of planning.

     

    How is it that, with the announcement of excellent news, both companies lost huge amounts of market capitalization?

     

    OK, say the good news was already baked into the price. Still, why the huge drop on that particular day? And with trading halted during regular hours and opened again after hours and pre-market today - precisely when small investors are least able to act to save their earnings?

     

    By the time the market opened to regular trading this morning, HZNP had lost most of what it was going to lose for the entire day, and AMRN joined it within an hour of opening. The deal was done.

     

    There was no bad news people didn't already know. They knew an NCE decision wouldn't necessarily be coming at the same time; they knew that Horizon's new drug wasn't a sure big winner in the market.

     

    Yet AMRN's price rose to $15 by July 1 and stayed in that range until July 26, the good news day; while Horizon's rose to $8 by July 1 and remained in that range until July 26, the good news day. Then both crashed to a certain level and stayed there.

     

    Talk about a price being baked in. Like I said, this reeks of criminality - and I don't use that term loosely, though we learn more every day about the blatant and non-prosecuted criminality on Wall Street. This was a classic example of certain people with privileged information and coordinated actions using the market as their own private piggy bank.

     

    It was not just simple shorting. It was more like these two stocks were condemned criminals sentenced to be shot at dawn, and that's exactly what happened. Such executions don't happen by accident. If this wasn't an inside job, I don't know what is.
    27 Jul 2012, 09:26 PM Reply Like
  • mitrado
    , contributor
    Comments (1948) | Send Message
     
    If $AMRN's good news was already baked into the price... why would the stock soar to near $16 a week before, on rumours, and doesn't even touch $16 after the confirmation!?

     

    Do you think the downtrend will continue for some days or are we done already!? It seems dumb that $AMRN trades so low at this moment...
    27 Jul 2012, 10:03 PM Reply Like
  • Scrying Biotech
    , contributor
    Comments (1486) | Send Message
     
    Let's slow down here. I don't know what happened to Amarin, nor for that matter Horizon, but I followed the latter a bit in the past week and I think I can tell you what transpired there. Many people, including most of us in the Seeking Alpha community are now aware of the FDA approval bump. About two weeks to two months before an approval of an important product the stock of that company ascends relative to the size of the pharmaceutical. In Horizon's case, the curve was predictably steep but the companies financials were not readily available on Share Builder where I invest and I am sure this was relatively true elsewhere as well. Within a three week period between June and July the stock doubled in price as did every lucky investors money. Now for most of us, that's enough! Waiting out an FDA decision that could go catawampus is problematic and risky. Horizon's stock chart shows this pattern of indecision quite nicely from July 1st to July 26th with a slight bump in last minute gamblers starting on July 23rd. I believe people got cold feet the day before the decision. This was augmented by an article written and published in this site by someone who delved into Horizon's financials in some detail. His conclusions I believe were erroneous but the stilting effect was dizzying and people jumped off the Lodotra/Rayos ride.

     

    This was not criminal activity! It may have been dirty politics on behalf of other pharmas who didn't want Horizon to succeed but all is fair in love, war and the stock market.

     

    Peace,

     

    Michael Webb
    28 Jul 2012, 07:03 AM Reply Like
  • William LeGro
    , contributor
    Comments (108) | Send Message
     
    I have no idea what will happen to AMRN's price - my guess is that it will be a couple of weeks of ups and downs till Aug. 17 and the NCE, which I think it will get since AMR101 really is a new drug. But what the shorts have planned for that approval I obviously don't know, but wouldn't be surprised if they pull a fast one again. After that it could again fluctuate but in a general upward trend - I think it's a decent company with an excellent drug and will be a natural for a buyout, so to me it's a hold and always has been. Once I saw what happened to ARNA I half suspected it would happen to AMRN. I think ARNA will also gradually come back.

     

    HZNP I'm not so sure about at all anymore. I was ignorant about its financials and took a bath because of it, not hopeful of recovering that money (I wish Shorty Shkrelli had posted his data [available to anyone who knew how to look] earlier than the day of the FDA announcement, but then he wouldn't have been able to mop the floor with us). I just don't have time or ability to do any real DD on this stuff, and so I rely - sometimes wisely, sometimes not - on what I read on SA and other resources. I do my best, but obviously it's not good enough, so if you're asking me for predictions based on real knowledge, you're asking the wrong guy. I do at least as well as my wife, who had a "financial planner" who was a licensed incompetent idiot, not nearly as good as what I've seen on SA from certain columnists.

     

    And all we're doing is trying to recover what's left of our lifelong savings from repeated crashes (caused by gamblers and crooks), the dismal performance of mutual funds (I mean, they underperform the S&P!), and the total illusion of 401Ks (a terrifying glimpse of what privatizing Social Security would be like).

     

    Rant rant rant...sorry...I'm a writer, and I just go on and on and on...
    28 Jul 2012, 01:37 AM Reply Like
  • mitrado
    , contributor
    Comments (1948) | Send Message
     
    "I have no idea what will happen to AMRN's price - my guess is that it will be a couple of weeks of ups and downs till Aug. 17 and the NCE, which I think it will get since AMR101 really is a new drug."

     

    The NCE decision should come pretty fast. August 10 is nearly here.
    The '889 patent allowance on August 17.

     

    But what I fear the most is the short-sellers combined actions. If they can bring down stock prices just because they want, any investment in the stock market will always be a gamble.

     

    We can't invest in such scenario.
    We can only pray our stocks will move up... and that is not an investment. :-/
    28 Jul 2012, 09:41 AM Reply Like
  • veata
    , contributor
    Comment (1) | Send Message
     
    I bought in on Amrin around 7.50. I also picked up more at 12.00.
    My wife and I have done our dd on this stock. I had a thirty year broker tell me to sell at 9:31 expecting an ARNA, VVUS scenario.
    I did not heed his advise and will continue to stay invested in this stock. It is amazing that Duke energy gets a downgrade and is up the last two days and Amrin gets good news and is down. I am 39 years old and want to invest not trade this market. I could not look my wife in the face shorting and trading only to be outdone by bigger fish and lose our nest egg. It is definitely not the market my Father was so successful in. Good luck Long Amirin.
    28 Jul 2012, 03:26 PM Reply Like
  • liam ocean
    , contributor
    Comments (2) | Send Message
     
    Arena was mainly individual investors whereas Horizon was mainly investment firms doing the bidding. When the big boys sold early (as they know whats going) the stock went south early. It's as simple as that.
    30 Jul 2012, 12:42 AM Reply Like
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