AVANIR Pharmaceuticals (NASDAQ:AVNR)

CAPS Rating: 1 out of 5

A pharmaceutical company focused on developing, acquiring and commercializing novel therapeutic products for the treatment of chronic diseases.

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Player Avatar zzlangerhans (99.81) Submitted: 3/29/2010 2:11:12 PM : Underperform Start Price: $2.51 AVNR Score: +9.48

I'm finally getting around to rating Avanir after watching them for years. I missed one nice opportunity to green thumb them at 1.7 earlier in the year, expecting an uptrend as they approached the NDA submission of Zenvia for pseudobulbar affect. My threshold was 1.6, oh well. Now Avanir has enjoyed that boost including a 16% jump today with no news reported. I see a couple of things happening short-term. One is a quiet decline in the share price 10-20% prior to the NDA submission. The second is that the share price continues to rise above 3 until the NDA is submitted. But after that I'm not expecting much enthusiasm leading into approval. The positive phase III trial results led to a poorly-sustained high of 2.84 and were followed by a nadir of 1.7. This will be a somewhat shaky NDA leading to a product with limited commercial potential. And 25M in cash at the end of 2009 indicates the company will not have sufficient liquidity to carry them through the PDUFA. Does anyone want to bet we'll see dilution soon?

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