As I said in another post, I don't know what will happen as every situation is different, but with a market cap of $480M, positive adcomm and eventual approval are NOT yet fully priced-in. Although it has run 37% since last Thursday, by comparison, ARNA ran 41% in the 4 days prior to Adcomm. ARNA then jumped more than 65% to $6.36 on positive adcomm. By PDUFA date it had traded up another 100% to $13. Don't kid yourself that every situation is the same and AEGR won't pop.
46% of shares are held by the top 5 institutional holders, including JP Morgan. Another 9% are held by Execs and Directors. They won't be selling after Adcomm. Couple this is 1.7M shorted shares (Sept 28th) and a high pps of $22 after phase 3 results released 2 yrs ago . . . . I'm not sure I would be anticipating a big sell off. Plus . . . tomorrow is ISIS adcomm and if negative, I would be upset to have sold out of my long position in advance.
It is much more likely to pop on a positve adcomm than it is to sell-off, given all information. NPSP has sold off 2.5%, but has gotten a couple of upgrades today and will likely continue to trade-up as the PDUFA date approaches. That said, NPSP has a $850M market cap and is not likely to achieve much higher net income long term than AEGR. AEGR, even with VERY conservative estimates, will have $400M in revenues and $75-$90M net income. At a small multiple of 10x earnings, that's $750-$900M market cap. We are currently around half of this.
As I said, i dont even deny it will pop. It prob will.. im just saying the amount it does is prob not worth the risk... the balance of how much it could go down. is worse than how much it could prob go up.... all im saying...when i say down, i mean the still relative chance that it does not get approved.