Stock price of Genzyme spiked on the news that FDA granted approval to Lumizymethel (aglucosidase alfa) for the treatment of late onset Pompe disease. Pompe disease is a rare and often fatal condition that disables the heart and muscles due to deficiency of an enzyme called alpha-glucosidase (GAA). Lumizyme, marketed outside the US as Myozyme is approved for the treatment of Pompe disease in about 45 countries and is available in the US for the treatment of infants and children.
Approval of Lumizymethe was expected on Jun 17, 2010. The only surprise was that the approval came about three weeks early. The strong up move in the stock price apparantley was the result of investors not understanding that the approval was already included in earnings projections. $GENZ was an easy pass through all of ZYX Change Method screens and we took the trade. Since the market was extremely volatile, we took profits on the very first technical sign that the price may turn up. In a less volatile market, we would have waited to exit and with the benefit of hindsight would have captured additional return. We remain true the ZYX Change Method guideline to never allow a profit to turn into loss.