ALIM Working toward New High Territory Since IPO

I should add that ALIM only went public in April of this year in an offering underwritten by Citi and Credit Suisse via an offering of 6.55 million shares at $11.

The company's lockup expired on October 18th of 2010.

ALIM has a presentation scheduled for 3:55 p.m. today at the Oppenheimer 21st Annual Heath Care Conference in NYC.

Another conference presentation is scheduled for 11/10 at the Credit Suisse 2010 Healthcare Conference in Scottsdale, AZ at 6 p.m. eastern time.

Finally, a third presentation is scheduled for November 17, 2010 at the Citi 7th annual Small/Mid Cap Conference in Las Vegas at 2:35 p.m. eastern time.

I have been unable to develop real conviction about this name for a number of reasons, one being that I have not followed this company for very long. Issues related to patents seem like a potential pitfall, and the shares confront an almost completely "binary event" in the form of the expected FDA meeting in December. There are no options trading on ALIM.

The "realted stock" Psividia (PSVD) which holds a royalty interest in ALIM's product, does have options that trade, but they are extremely illiquid.

Also, there is the issue of just how much improvement in vision is provided by treatment with Iluvien and how that will be evaluated by the FDA. Competitive concerns round out my list of pitfalls: I simply am not familiar enough with alternative treatments.

Finally, there still is the potential that the FDA may schedule an advisory committee meeting relative to Iluvien. I am not even certain that the FDA has these for devices (as opposed to drug or biological products for which they certainly sometimes do schedule Advisory Committee meetings).

That leaves the intrepid stock trader with two simple concepts:

1) trade with the technicals; It seems unlikely that bad news will emerge prior to the scheduled FDA date other than the scheduling of an advisory committee meeting.

2) Honor the time-tested maxim of "buy the rumor, sell the news." The corollary of that advice is to "Buy the sizzle, sell the steak." A trader operating on that basis might try to trade the stock based on technicals and price action, then take out the capital invested, leaving a core position equivalent to the profits to ride on the FDA decision. Admittedly this is a whimpy strategy, but it is one that allows the trader to "live and trade another day" in the event of an adverse outcome.

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