Dreams do end
I know that's a strange title for a post about the stock market but that's how I feel. You see, yesterday Pfizer issued a press release about a company, Encysive Pharmaceuticals, in which I owned stock.
Now this is a troubled company, to say the least. I bought 7,000 shares of ENCY (the stock symbol for Encysive) on 6/19/2007 at an average price of $2.1157. That purchase was highly speculative and is the only holding in my Keough account. I admit it's a rather odd stock to hold in a retirement account but I like to take some risks. :-)
In the past year, ENCY has been as high as $5.02 and as low as 59 cents. The stock has been threatened with being delisted from NASDAQ and that's essentially the kiss of death. The pink sheets aren't a place where a cash burning company like a biotech can exist for long. You might say the handwriting was on the wall for Encysive--and Pfizer took advantage of this to buy out the company yesterday for $195 million. Now that's not a bad price ($2.35 a share) considering that the stocks been trading around 75 cents lately, but it's a very inexpensive way to aquire a drug with a lot of potential.
The drug I'm talking about, and the reason I bought the stock, is Thelin, a treatment for a life-threatening lung disorder known as pulmonary arterial hypertension. Thelin is on the market overseas, but the sales have been slow due to Thelin not being approved by the FDA in the USA. And FDA approval doesn't seem likely soon which is why the company is in so much trouble despite having a marketable drug.
Pfizer, on the other hand, already markets a product for the condition called Revatio, so aquiring another one is great synergy. In a statement Wednesday, Pfizer said it believed the products were complementary. Yeah.
As for my dream ending, I really wanted to see Encysive succeed. But there is a silver lining. With Pfizer's money behind Thelin, it's a lot more likely to be used on patients soon.
Now this is a troubled company, to say the least. I bought 7,000 shares of ENCY (the stock symbol for Encysive) on 6/19/2007 at an average price of $2.1157. That purchase was highly speculative and is the only holding in my Keough account. I admit it's a rather odd stock to hold in a retirement account but I like to take some risks. :-)In the past year, ENCY has been as high as $5.02 and as low as 59 cents. The stock has been threatened with being delisted from NASDAQ and that's essentially the kiss of death. The pink sheets aren't a place where a cash burning company like a biotech can exist for long. You might say the handwriting was on the wall for Encysive--and Pfizer took advantage of this to buy out the company yesterday for $195 million. Now that's not a bad price ($2.35 a share) considering that the stocks been trading around 75 cents lately, but it's a very inexpensive way to aquire a drug with a lot of potential.
The drug I'm talking about, and the reason I bought the stock, is Thelin, a treatment for a life-threatening lung disorder known as pulmonary arterial hypertension. Thelin is on the market overseas, but the sales have been slow due to Thelin not being approved by the FDA in the USA. And FDA approval doesn't seem likely soon which is why the company is in so much trouble despite having a marketable drug.
Pfizer, on the other hand, already markets a product for the condition called Revatio, so aquiring another one is great synergy. In a statement Wednesday, Pfizer said it believed the products were complementary. Yeah.
As for my dream ending, I really wanted to see Encysive succeed. But there is a silver lining. With Pfizer's money behind Thelin, it's a lot more likely to be used on patients soon.
Comments
One hopes though that Pfizer will continue to develop the drug, because heaven knows that not everyone responds to every drug equally.
Sorry you got slammed with the price drop, but dude if you're playing with 14K on a highly specualtive stock, I think you can afford it!
I'ts been too long since I wored there to keep up with all the new stuff...
As for the "wored" thing, I always wondered just what you were doing in RTP. Now I know!
Nice.
On the other hand, Tiff's comment vis a vis Viagra would up the stakes and make it a reasonable strategy. I guess it's just going to be a wait and see thing for me now.