The situation with Titan Pharmaceuticals, Inc. (NASDAQ:TTNP) developed similarly to what we predicted, so far. On May 27, the FDA approved Titan’s Probuphine, an implant of buprenorphine for opiate addicts. In our previous report on Titan, we had said:
If it is approved, look for the stock to go near previous highs, but not for long as marketing realities will quickly set in. That said, the trading strategy for this one is to stay away if you are risk averse. If you have extra pocket cash hanging around your account though, a very small position could get you some significant short term gains, but don’t hold it long after approval at all, because it will probably fall back down within months or maybe even weeks, certainly after the first sales report is released post approval.
Well, Titan did reach a new 52-week high on the news, not quite to previous highs around $12.50 but a commanding 24% jump to $8.74. And then almost immediately the stock faded. We thought it would take weeks but it took less than a day, and shares ended 3% lower than when they started post approval. The market may be having similar thoughts as more seasoned traders realize that it’s not going to be easy convincing addicts to have themselves surgically implanted with an insert just so they don’t have to take a pill.
Yes, Probuphine has dosing advantages over oral administration as we covered earlier, but they may not be enough to command a sales lead. While novice traders cheered over approval, smart money appeared to sell the really immediately. Our recommendation is to stay away from Titan and let other people risk money on Probuphine’s success in