I’ve made a few mistakes in biotech this past year. Most notably my disregard for the financial imperatives facing NovaBay (NBY) and my reaction to the head-fake that Synergy Pharmaceuticals executed on the hiring of the former Shire PLC executive as being demonstrative of a possible buyout. Lessons learned!
While I don’t want to triple down on those mishaps by chasing a falling star, or in the more common parlance of finance – catching a falling knife, I am going to be buying shares of Zafgen (ZFGN) tomorrow morning if there is no news of a positive nature, or in the wake of news regarding something catastrophic. In the instance of no news, I’ll be doing this because my reading of the situation indicates that this cancellation of the recent roadshow appearance is likely due to a positive partnering opportunity and not some failure in the clinic.
If, however, there is bad news, I’ll be buying the dip in part because the share price has already been punished by un-grounded investor fear, and because most equities that experience a clinical trial failure bounce as high as 40% off bottom if there are a number of other pipeline opportunities in place.
Obviously, if positive news is released this morning, I’ll leave the stock alone.
Always be well…