Cadence Braces For PDUFA (CADX)
Cadence Pharmaceuticals Inc. (NASDAQ: CADX) is about to have a monster event that will be one of those where the stock becomes a home run or a flop. The company has a November 13 PDUFA date for Acetavance, an intravenous version of acetaminophen, as a treatment for acute pain. The drug is
OptionsHawk.com noted to us yesterday: “It is seeing bearish risk reversals trade as November $12.50 calls are sold and the $10 puts are bought for 2,000 contracts at a price of $1 per spread. There is a lot of OI here so it is tough to judge whether these are opening buyers, but implied volatility is at 138% ahead of the event.”
After we took a look at the options trading data yesterday, there were 2,308 $10 PUTS traded for NOV and 2,478 $12.50 CALLS traded for NOV.
While it was not that many shares, it is always interesting when you see insiders sell shares of a biotech company ahead of an event. That is what we saw with Cadence in recent days and weeks.
Cadence ended its last quarter with $96.6 million in cash and equivalents and it is still under a $100 million active shelf registration for mixed securities from early September.
JON C. OGG
NOVEMBER 11, 2009
