Adcom trading

[mrhaigs]

Does anyone know if mnkd trading will be halted during the adcom? I know its common practice to do so, however I am aware of other companies, Titan pharma in particular, that were not halted during their adcom meeting.

Thanks in advance,
MrHaigs

[liane]

Generally, halted all day (I believe even after hours too). You are correct, on rare occurrences such as the one you mention, it is not halted. But I think there is too much riding here for them not to halt.

[spiro]

I found this discussion about ARNA. from 2012. They were halted on AdCom day. i do not know how accurate this info might be. 

ARNA PPS/ADCOM History

For many weeks before the last ADCOM on Sep. 16th, 2010, the ARNA PPS was stagnant for a long time even though there was significant daily volume, a pattern similar to what we have been seeing lately. The price at that time sat tight in the high $3.00's. (Unfortunately, we have not been seeing that price lately).

The PPS suddenly took off 46 trading days before the ADCOM date. There was one noteworthy pullback for one day on day #44. Then it resumed its steady march toward its pre-ADCOM high of $8.00 (intraday) and $7.95 (close), reaching it on day #33, a solid double in 13 trading days.

Tomorrow will be day #48 before the next ADCOM. Day #46 will be next Tuesday.

The PPS held up fairly well in 2010 until 2 days before ADCOM, trading mostly in the high $6.00 to low $7.00 range. On days #2 and #1, it crashed all the way back to $3.74. On the day of the ADCOM meeting and vote, trading was halted. The day after the ADCOM vote, the PPS closed at $1.99 and continued to decline more afterward.

So: (# days before ADCOM Vote)

Day #48 - Where we will be tomorrow, March 2, 2012
Day #46 - Beginning of pre-ADCOM run in 2010
Day #33 - PPS intraday/closing high in 2010 ($8.00 / $7.95 = X2 increase from Day #46)
Day #2 - 40% plunge to $4.13 (2010)
Day #1 - Another 10% plunge to $3.74 (2010)
Day #0 - 2010 ADCOM (Halted)
Day # -1 - Another 47% plunge to $1.99 (close on 9/17/2010)

[mrhaigs]

Nice find. I was reading this article, but still don't know why Titan was allowed to trade during it.
propthink.com/a-simple-strategy-to-benefit-from-this-rare-biotech-situation-the-non-halted-adcom/

This board is the best one I've found by the way. Just wanted to throw that out there.

Thanks
Mrhaigs

[liane]

Don't know why it traded that day - maybe because it is so small?

[babaoriley]

Spiro, great stuff you've set forth above, thanks! You see why I have been so hot on a partnership prior to Adcom; having said that, I don't think we will trade quite like ARNA prior to halt for Adcom. We should have a rise into the date, and I don't know how Adcom briefing docs can be so bad as to send us down significantly prior to halt. Quite a poker game, though, if you sell your "safety" shares too soon, you may miss out on an extra dollar or two prior to halt, if you wait too long and an ARNA happens, well, you'll be kicking yourself for sure.

Just remember, if you have 20X shares, and decide to sell 8X before Adcom, nothing says you have to sell all 8X at 3:58 on March 31, you could sell 3X on Thursday, 2X on Friday and the last 3X on Monday, for example. If you want to be bolder, hold the 20X and sell some covered calls against whatever percentage of your shares you are comfortable with. Example, stock is at $7 on Thursday, sell some Jan 2015 or Jan 2016's at $10 strike, you'll keep $3 more of appreciation if it happens and you'll get your option premium, too. If the worst happens, you'll have your option premium.

Or, if you can easily afford to get washed out, then hold onto to them all!