Friday, June 5, 2009

Titan Pharmaceuticals (TTNP.pk), Why the Recent Price Decline?

Titan Pharmaceuticals' (TTNP.pk) stock price has dropped to $1.25 after trading as high as high as $1.75 after news that the Food and Drug Administration (FDA) approved the company's licensed schizophrenia drug, Fanapt.

Fanapt is licensed to Vanda Pharmaceuticals (VNDA) and Titan will receive royalties of between 8-10% on all sales.

As the stock price has dropped many investors (especially those who bought in after the Fanapt approval news) have needlessly grown impatient, at least judging by the number of emails that I have received lately.

Nothing has changed in regards to the potential of the stock during the drop. With the Fanapt approval, Titan is guaranteed a revenue stream as early as the fourth quarter of this year when the drug is due to hit the market. Probuphine news is also just around the corner and Titan is a reborn stock with the potential for serious growth.

However, it is important to note that TTNP.pk just soared from under five cents to nearly two bucks in a relatively short amount of time. Those kind of moves don't happen every day and are often followed by months of volatility, especially with pink sheet stocks.

Many investors who owned TTNP since it was trading below five cents are not concerned about the future of the stock because they are happy to sell right now for a 3000% gain. Their selling should be considered a buying opportunity, and nothing more, for those looking to get in now.

Additionally, the big boys are consolidating their positions before another runup and be assured that they like to 'shake' shares from the little guy along the way; meaning that they drop the price of the stock in order to convince the 'weak hands' to sell their shares. 'Weak hands' is just slick lingo to describe people who sell at the first sign of trouble.

When investing in any stock, it's important to remember that no stock always goes up. That kind of thinking is what put the world in a global recession. It's also the kind of thinking that had General Motors (GM) believing that every car the company built would be bought by a willing consumer.

The point is, that thinking is naive thinking.

Nothing has changed with the company to warrant investors' concern right now, but if the recent price volatility has you feeling queasy in the stomach, I suggest investing in Electronically Traded Funds (ETFs) instead of biotech pink sheet stocks.

For Titan Pharmaceuticals, the story is just beginning.

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