Hopes were high that the drug would be approved and launched in the U.S. this year, but CEO Joseph Podolski said in an interview with Bloomberg News that he didn't expect that to occur until 2000 at the earliest. According to a company press release, Zonagen and Schering-Plough decided to forego a June FDA Review Panel of Vasomax because it wants to wait and submit additional information from recent clinical trials. Despite this lower success rate, Vasomax appeared to have less severe side effects. Today's move, and previous volatility in Zonagen's price, indicate the risks of hopping into a one-wonder drug company.
Investors plop in and out of the stocks as incremental news is made available.
The stocks soars when the good news appears, but they tank when bad news emerges. Investing in these types of companies without having any medical knowledge or insight is tricky. You have to have a stomach of steel to endure the roller coaster ride. You'll hit on a big winner every once in a while, but there will usually be many losers. For those more faint of heart, a better way to play the emergence of new drugs is a large, well diversified company.