Common Sense for the Biochemist

Holy cow! So I just got around to reading up on this fiasco. I had heard a little about it on Friday during "Mad Money" on CNBC. I just got finished reading up on the latest thanks to may daily updates from Biospace.com. From my quick research on the issue, it looks like the wheels didn't just come off, but blew-out, flew off, and killed three pedestrians. Some products produced by these guys included a generic version of Vicodin and Ritilin. I did a little snooping on their website. From their press releases, it looked like they were growing like mad last year. They had announced FDA approval of several generic drugs, they had acquired another company, and they have pictures of their new manufacturing facility on their website. All of the sudden, their CEO resigns, they withdraw their products, and shut down manufacturing operations. Browsing through the FDA warning letters, Able was cited by the FDA April of last year for not reporting some adverse side effects to several of its products. It will be interesting to see how this story unfolds. Their stock price has dropped from about $25/share to $5/share since Thursday. The question here is who is responsible for protecting the public shareholder. This is not some sort of accounting scheme that caused this collapse. This is a collapse in their accountability with the FDA. Was their any warning signs that should have been picked up on? Cramer's (from "Mad Money") advice is not to go near these small generic drug manufacturers. Unfortunately, there are many blockbuster drugs out there coming off of patent that are going to be prime candidates for generic versions and these generic drug manufacturers (the good ones at least), are going to be very profitable. Question is, how can you tell which companies are the "good ones"? I'm not done on this one yet, just done for now (its supper time).