Biotech Watch

We have a short week ahead folks. Monday, the market will be closed to observe Martin Luther King Jr. day. Nonetheless, there are a couple of big events in biotech that investors should keep their eyes peeled for.

Both events are PDUFA date events. PDUFA dates are the deadlines that the FDA has to either approve or reject a New Drug Application or Biologics License Application.

In most cases, when a publicly traded company announces that a new drug or biologic agent has been approved for sale in the United States, we tend to see dramatic gains in the value of the stock.

On the other hand, when the FDA decides to reject a new drug or biologic agent, issuing a Complete Response Letter as to why the treatment cannot be approved at that time, the value of the stock can see dramatic declines.

Both Epizyme Inc (NASDAQ: EPZM) and Merck & Co., Inc. (NYSE: MRK) have PDUFA dates in the week ahead, suggesting that we could see quite a bit of action out of these stocks.

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