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by Andrew Vaino
Vaino's Biotech Corner



Encysive Pharmaceuticals (ENCY) just announced the FDA has given them a third approvable letter for their pulmonary arterial hypertension treatment Thelin. The FDA has suggested more clinical data is required. More details will be available when Encysive hosts a conference call to discuss this at 8 AM Monday morning.

Worse yet for Encysive, Gilead (GILD) received approval from the FDA for their drug Ambrisentan for the same indication. To be clear, the FDA will require strict conditions for prescribing Ambrisentan, but strict conditions are much better than not having access to the US market.

After-hours trading in ENCY was actually halted about 5:45 pm EDT. The combination of the GILD approval and ENCY's 3rd approvable means the stock is in for a massive plunge Monday morning and will, I have no doubt, duck under the $2.40 lower limit of the option straddle I suggested on June 10. Ouch.

Long term it's difficult to say if sales of Thelin in Australia, Canada, and Europe will be viable, especially in the face of competition from Ambrisentan. ENCY may be a buying opportunity if it gets below $2 (which I think it will), but is definitely something to stay away from until the smoke clears from this.



RELATED READING:
- Encysive: Stock Beaten Down to a Possible Buy
- No Decisive Word on Encysive Pharmaceuticals




Andrew Vaino is a regular contributor to BioHealth Investor.com
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