Biotechnology Stocks

The Food and Drug Administration (FDA) plays a key role
Responsible for regulating the development of new drugs
Has developed rules regarding the clinical trials that must be done on all new drugs
Companies must test drugs through four phases of clinical trials before they can be marketed to individuals
Every year the FDA monitors the testing of 3,000 new drugs on nearly 200 million people to determine their effects
The FDA is relevant for investors specifically in regards to biotech and pharmaceutical companies
FDA approval can literally make or break the stock of a small company involved in developing new drugs
It is very common to see the stock of these companies skyrocket (or plummet) as test data is released

Upcoming Events In Biotech’s
SLXP (Approval decision date: March 24)
Drug: Xifaxan for hepatic encephalopathy
SOMX (Approval decision date: March 21)
Drug: Silenor for insomnia
CTIC (Approval decision date: April 23)
Drug: Pixantrone for non-Hodgkin's lymphoma
DNDN (Approval decision date: May 1)
Drug: Provenge for prostate cancer
POZN (Approval decision date: April 30)
Drug: Vimovo for pain relief

Large (relatively safe) Biotech Stocks
Amgen (AMGN)
Genzyme (GENZ)
Gilead Sciences (GILD)
Biogen Idec (BIIB)
Cephalon (CEPH)
Celgene (CELG)
Amylin Pharmaceuticals (AMLN)
OSI Pharmaceuticals (OSIP)

Big Pharma
Pfizer (PFE)
Merck & Company (MRK)
Johnson & Johnson (JNJ)
GlaxoSmithKline (GSK)
Sanofi-Aventis (SNY)
Novartis (NVS)
Abbott Laboratories (ABT)
Bristol-Myers Squibb (BMY)
Eli Lilly and Company (LLY)

New Trade Idea in Biotech!

Genzyme (GENZ)
High Risk Category
Bull Call Spread
Contingent on stock being >= $58.02
Buy to open: July 2010 60.00 strike call Sell to open: July 2010 65.00 strike call
Limit debit: 1.65 (or $165 per spread traded)
Maximum reward: 3.35 (or $335 per spread traded)