same dance different tune

In February 2013 I invested in two stocks, Unilife and AcelRx (ACRX). The later is developing a sublingual pain medication to replace the PCA morphine pump in post-surgical situations.

I purchased ACRX at $6.65. Upon release of positive Ph3 data the SP almost doubled to $13.12. During the following 30 days, shorts drove the price down to $9.05. Then, following a brief rally to $11.22, continued pressure from shorts succeeded in reducing the SP to $6.80 (a 48% decrease from the high). That was in November, 2013. Before the recent NASDAQ biotech sell-off began on March 19th., ACRX had once again reached $13.00.

My point isn't that Unilife and AcelRX are the same. They're not. One is a an equipment manufacturer and the other a drug development company. However, both are higher-risk development stories, where fundamentals are often replaced by market sentiment, emotions and momentum; where SP swings often exceed market indexes.

Obviously I'm not happy with the recent sell-off but I will hold the course. I believe that new contracts will eventually be announced, not because I buy the hype, but because five major pharmaceutical companies have conducted due diligence and have seen fit to invest in Unilife and, with the recent financing deal, OrbiMed has further validated the business model. More contracts will follow and, like ACRX, when the news arrives, the SP will recover and move on to new highs.