Zogenix, Inc. (NASDAQ:ZGNX)

CAPS Rating: 3 out of 5


Player Avatar zzlangerhans (99.85) Submitted: 2/27/2013 7:40:46 PM : Underperform Start Price: $1.84 ZGNX Score: +17.64

Wow, Zogenix up as much as 50% today because the FDA isn't going to have their CRL on time. In case everyone forgot, an FDA Advisory Panel voted 11-2 against Zohydro approval in December due to the high potential of abuse and complete lack of abuse-deterring features of the drug. If anyone knows of a case where the FDA has gone against such an unequivocal negative recommendation on the basis of safety, I would love to hear about it. The FDA generally errs on the side of caution and it would be political suicide to approve a dangerous drug with a strongly negative Ad Comm recommendation on the record. The FDA briefing documents on Zohydro were pretty negative as well. However, I've learned that anything is possible when it comes to the FDA. I still recall their shocking and pointless about face on Vanda's spurious antipsychotic Fanapt, so I won't be shorting Zogenix even though I think the likelihood of a CRL is higher than 90%.

Most of the ridiculous 50% jump on the PDUFA delay comes courtesy of Wells Fargo and Leerink Swann who provided guidance that the delay indicates a likely Zohydro approval. I'm sure their clients are grateful for the opportunity to get out at a much higher price than they would have otherwise. When the CRL finally makes its appearance, look for complete silence from those venerable institutions.

Member Avatar trismigistus (< 20) Submitted: 2/27/2013 10:11:12 PM
Recs: 0

Eat Crow Much?

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