The FDA approved Trospium chloride for sale in the US using the commercial name Sanctura. A few months before the approval, Indevus had licensed commercialization rights to the Croatian pharmaceutical company Pliva, rather than build its own sales force. The approval was timely for Pliva, which faced the imminent loss of patent exclusivity for its biggest drug, the antibiotic Zithromax.
Sanctura was an anticholinergic, a drug that blocked one of the chemicals that carries signals in the central nervous system. Anticholinergics have good and bad properties. The good includes a blocking of smooth muscle (the type that lines the bladder for instance) from spasming, which caused the sudden need to urinate. The bad includes dry mouth, drowsiness, dry eyes, dizziness and a host of other annoying and uncomfortable side effects. Sanctura's side effect profile was less severe than some of its competitors, and Indevus and Pliva were counting on that lesser side effect profile to convince doctors to prescribe it -- and to take a big chunk of a 2 billion dollar a year market.
That was not going to be easy, however, since the competition was Pfizer (the drug Detrol) and Johnson and Johnson (Ditropan). The fact that Sanctura needed to be taken four times a day didn't help either.
I knew from my doctor days that four times a day doesn't work. Once a day is great: put the pills next to your toothbrush and you'll remember to take them. Twice a day -- same thing, toothbrush. Three times a day? Take one with each meal.
Four times a day? Uh...
Still, the big binary had passed and the outcome was the one I wanted. On Thursday, Sanctura had yet to be approved and faced the possibility of being worthless; on Friday it was approved and was a real, marketable product. Outcome had defeated optionality. Common sense, logic, physics, mathematics and universal truth all dictated that Indevus, by replacing uncertainty with a positive outcome, had to be a much more valuable company after the approval than it had been before.
In other words, the stock had to go up.
IDEV opened at 8.52 that morning, after starting the year just under $6.
If I remember correctly, the stock was halted for about an hour, and resumed about 2:00. I sat back and waited for the fireworks...
(more to come)