Acrux downgraded to Hold

Acrux's share price has increased 11% after the US Food and Drug Administration (FDA) announced it now requires all testosterone product manufacturers to add the risk of blood clots to their warning labels. Although we thought more stringent rules surrounding warning labels might resolve the current FDA investigation into whether testosterone replacement therapy increases the risk of stroke and heart attack that caused Acrux’s share price to fall 72% from this year's high of $2.72, we're not getting too excited just yet. The news is unrelated to the ongoing investigation which might not be completed until early next year. There's still a long way to go with this recommendation, but with Acrux's share price increasing 40% since we upgraded the company just two weeks ago in Ignore the FDA and buy Acrux on 13 Jun 14 (Speculative Buy – $0.80) our margin of safety has shrunk considerably. Until we hear more from the FDA or the share price crashes back to earth we're downgrading Acrux to HOLD.

Note: Our model Growth portfolio owns shares in Acrux.

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