With BDSI trading at nearly seven dollars on anticipation of an FDA decision regarding Onsolis, it's a good time for investors to realize some profits to protect their exposure to the stock in the event that the decision is negative.
I like the chances of an FDA approval, but nothing is a sure thing in the stock market and if you're already sitting on significant gains, now is a good time to realize some of them; not all, just some.
Selling into a spike, even while believing that the stock will still move higher, will have you missing out on some gains but will also prevent you from losing everything.
I sold some shares of DNDN earlier this year on the day before positive Phase III trial results were released in order to protect myself against negative results. I lost out on some significant gains, but I don't regret the decision to sell; of course, I did leave enough shares in my account to also make a lot of money.
The point is to not be greedy. The biotech market allows investors to bank doubles and triples (at least) on good news releases or positive trial results, percentage gains that you'll never see in 'safe' investing, but they are only paper gains until they are realized.
There are a lot of unhappy INSM investors today after the release of sub-par MMD trial results and, although that company is far from finished, many investors wish that they had sold during the most recent runup.
Insmed will recover, but it would be wise to allow the lessons of that stock convince investors of BDSI to sell some of their position now, before the news is released. It only makes sense, especially since so many purchased shares for just under two dollars earlier this year! Selling those shares for over six bucks would make that trade a triple!
Disclosure: VFC is long BDSI