The short interest is immaculate which will create an enormous short squeeze should this get approved. You will have the shorts who immediately get out once the drug is approved and then those that will double down and try and reduce their price. The theory behind this is that even if approved, stocks often jump to ridiculous prices as everyone dives in. However, the thought that the drug will not launch until Q2 2011, they will go it alone, and possibly dilute, all make for doubling down an attractive thing for shorts.
So, I don't think we will have this massive pop and pop again like ITMN did after their advisory panel. But what i do think will happen is obviously upon approval (if we get it as we hope and think) I say we shoot up into the high single digits ($9) and then by the following week settle in the $6 range. I would say pre-market is always the best time to exit your approval positions, I see time and time again approvals go through and stocks slowly drop throughout the day (ISTA happened to me twice in the past two years). So, if you have an exit strategy upon approval, it would be to sell to that poor sap buying in the pre-market at $8 or $9 then watching it drop off throughout the day.
As for me, I will most likely sell half of my position if approved and let the other half ride into next year. Good luck all, seriously, if this drug does not get approved, I would be very surprised and would seriously think about never buying a biotech stock again, I would consider the FDA even nuttier than they already are, lol, GLTA.
