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So Much For The Summer Doldrums

What a crazy week, right? Monday, Amgen had a huge upside revenue and earnings surprise. Tuesday, the Food and Drug Administration issued its new restrictions on the use of Amgen's anemia drugs in certain cancer patients. Later that same day, Elan and Wyeth released the big Alzheimer's drug test results.

Wednesday, those two stocks tanked. Thursday morning, Bristol-Myers Squibb said it wants to buy all of ImClone Systems . Thursday afternoon, Biogen Idec and Elan reveal two new brain infection cases from their multiple sclerosis drug Tysabri. And then this morning, Schering-Plough announces the FDA's surprising rejection of its anesthesia-related drug. Wow.

And can I just point out the easy-come, easy-go for Carl Icahn? Yesterday, he was riding high on the spike in IMCL on the BMY buyout offer. Today, I'm guessing whatever he made there is being lost in the carnage of BIIB--assuming he still has a stake in it. What better example is there of the literally overnight risks and rewards of investing in biotech?

The BMY/IMCL story sparks a big biotech rally on Thursday as investors speculated about who might be next. Amylin Pharmaceuticals was one of the big beneficiaries, but today the shares are cooling off. Deutsche Bank big pharma analyst Barbara Ryan put out a research note asking, "Should Lilly Buy Amylin?" For the longest time, David Kliff, who writes "The Diabetic Investor" newsletter, has been answering that question, "Yes, yes, yes! Do it! Do it!"

I keep asking the LLY CEOs (Sidney Taurel and now John Lechleiter) the question, "Will you or when will you buy Amylin?" and every time they reply with something like, "We're very happy with our relationship with Amylin." The companies are partners on the diabetes drug Byetta and are working with Alkermes to develop a first-ever once-a-week diabetes drug. Anyway, Ryan writes that a LLY acquisition of AMLN "could be dilutive...by 12 percent." In other words, it would hurt profits. That's based on Ryan's assumption that LLY would pay $45 a share in cash. And so, she concludes, "Waiting makes more sense." Deutsche Bank makes a market in LLY and has done and wants to do more investment banking for the company.

Maybe as we head into August things might calm down a little...I hope. I need a break. Although, with the way things have been on the beat lately, I'm sure I just jinxed myself.


Video: Biogen and Elan shares fall after PML report, with CNBC's Mike Huckman.

Questions? Comments? Pharma@cnbc.com