Four Paired Stocks Worth Watching This Week Essay

Four Paired Stocks Worth Watching This Week - Essay Example However, at least three things mitigate this news. One is that the FDA is not compelled to heed the advice of its panels. Two is that pronouncements by spokespersons of the FDA point out that the recent panel recommendation summarized above is not likely to have an impact on existing applications for drug approval. This means that the applications for approval. Three, consensus wisdom from insiders is that at any rate, the two companies already have in their possession a wealth of existing, prior to approval clinical data on human trials involving measuring the impact of their respective medications on strokes and heart ailments, and can comply with the recommendations of the FDA panel if necessary, without resorting to new, pre-approval clinical trials. All these taken together means that while on the surface, the FDA panel recommendation seems to be somewhat of a drag on the approval train for Vivus and Arena, the reality, especially with the announcements of the FDA spokespersons hinting that the approval processes have a slim chance of being derailed, is that both companies are probably in for a rosy future as far as the approval process is concerned, at least at the moment. Indeed, in reaction to the news on the recommendation of the FDA panel, the stock prices of both Vivus and Arena rose (Edney and Larkin; The Fly on the Wall). This joint rise in the stock price underscores market perception and underlying market and research dynamics that couple the two stocks and make of the two a stock pair worth watching. Moreover, the two are locked in a tight race for billing and for first-mover, as well as for the corollary financial rewards, to get to market with their respective medications for obesity. It is interesting, looking at the stock price charts over the last six months, how in recent weeks the fate of the two stocks seem to have coupled even more tightly. Vivus shares spiked fifty percent in early February of 2012, and has plateaued at a level of arou nd US 20 dollars a share. Following this trend, Arena shares spiked 50 percent in early March, plateauing so far at around US 3 dollars a share. It is interesting to see how further milestones and market development for the two firms will reflect on their respective share prices (Edney and Larkin; The Fly on the Wall; Google Finance (a); Google Finance (b)). The market is on a keen lookout for key approval milestones for the two competing medications from the two firms. The drug Qnexa by Vivus seems to be ahead of the pack, with positive news coming from an FDA panel on February 22 of this year which weighed risks against benefits and found that the drug's risks were dimmed by its benefits. The FDA may or may not heed that panel finding, and at any rate come up with a decision on Qnexa by April 17 of this year. Lorcaserin, which was developed by Arena, is set for an FDA panel scrutiny by May 10. The FDA will then, by the 27th of June of this year, make its decision on the latter dru g. The consensus is that positive news for Qnexa/Vivus ought to translate to positive news for lorcaserin/Arena,