Hah @AbelianGrape. The halt news broke while I was having breakfast with my fund's co-directors (wife and daughter), and I reminded them we had this position in the portfolio and that we are going to hear some key news in the next few days.(So no-one can do a Homer and say I didn't tell them!)
While I am a pretty seasoned healthcare investor, this is the first time I have held a meaningful position in a pre-NDA approval business, simply because that space doesn't fit my investing rules, risk appetire and expertise. But you rarely get opportunities for this kind of risk-reward. However, the risk is still there. The way I explained it was, what portion of the fund is reasonable to risk for a 10% chance of losing everything, and a 90% chance of getting 2x - 5x within a couple of years? We concluded that if you had 90% odds of winning the Powerball Jackpot, you'd probably stake a fair bit. So it was a Simpon-esque breakfast this morning, for sure.
The key here is how good your assessment of risk-reward is. Now that is an abstract, unprovable idea in a one-shot play. So, the truth is I'll never know, whatever the outcome. If the drug is approved, I'll applaud myself for making a good judgement. If its rejected, I'll console myself saying that this was always on the cards. But the truth is, I'll never really know, and therefore will be unable to learn.
Whatever the outcome, I believe my process isn't quite as random as Homer's.