Pharmaceutical and biotech companies generally must endure the lengthy process that is getting their drug candidates to market through clinical trials. There is a fair amount to a great amount of risk involved, should a study come back negative or should a candidate not be approved. On the other hand, if a drug is approved or passes a clinical trial, there can be massive upside.
Suffice it to say, U.S. Food and Drug Administration (FDA) rulings and positive or negative trial results can make or break these companies.