Cramer: Down 30% in 5 Days, What Gives With Isis?
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The stock market has a habit of overreacting to things. Is that the case with Isis Pharmaceutical ? Jim Cramer examines.
Lots of stocks take a pounding but the decline in Isis was particularly painful for the Mad Money host because he recommended the stock as a speculative play about two weeks ago.
"I got behind Isis for speculation because I knew that the company had an orphan drug, Kynamro, going up before an FDA Panel last week," Cramer explained..
Kynamro treats an incredibly rare condition that causes insanely high levels of LDL cholesterol in children and radically shortens their lifespans.
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"Now, I knew that another company, Aegerion, had a drug for the same condition going up before an FDA Panel earlier in the week, but I decided to recommend Isis because I thought it had better risk-reward," Cramer said.
The company has a deep pipeline with 25 drugs in development and a giant cash hoard, so he figured that if the Panel didn't go well, the damage could be contained.
But when you play FDA roulette, sometimes you lose.
"Aegerion sailed through the FDA panel with no safety issues. But when Isis went before its FDA Panel, their drug was hammered with worries about safety risks, including a possible linkage with cancer."
Still, Cramer believes the FDA will approve Kynamro when they make their final decision at the end of January.
Does that mean down 26%, it makes sense to buy?
Before making the call, Jim Cramer spoke with Dr. Stanley Crooke, the founder, chairman and CEO of Isis Pharmaceuticals. Get all the details. Watch the video now!
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