Friday, February 03, 2006

Cramer Cripples His Followers, Again

Here's precisely why we use Cramer's picks as a contrarian indicator:
Eye-care company OccuLogix (RHEO) had two-thirds of its market cap erased Friday after its proposed procedure for treating vision loss failed to meet the main goal of a late-stage clinical trial.

The Ontario-based company's stock was plunging $8.43, or 66%, to $4.32 at midday, and shares of OccuLogix were changing hands at a furious pace. Around 12:10 p.m. EST, 16 million shares had been traded, more than 32 times the average volume for a full session in the last three months.

According to a preliminary analysis of phase III trial data, the experimental Rheo procedure failed to reach its primary efficacy endpoint. The Rheo was being studied as a potential treatment for the dry version of a condition called age-related macular degeneration. OccuLogix attributed the result to "an anomalous response" of patients in the placebo group.

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