King Pharmaceuticals (KG) Gets An FDA Approval
King Pharmaceuticals (KG) received FDA approval for its abuse-resistant painkiller Embeda which is meant to treat moderate to severe pain. the treatment contains naltrexone which can cancel some of the ill-effects of morphine.
BMO Capital Markets said it was keeping a “market perform” on the stock with a target of $10 a share.
The reaction of shareholders to the news was muted. The stock traded down over 1% to $10.45.
Douglas A. McIntyre
Using Stock Options in BioHealth Stock Screen (KG, ABT, WYE, PFE, GENZ, HGSI)
Whether it is mergers, earnings, or just plain vanilla hedging, it seems there is quite a bit of unusual activity in options trading. We have seen this in many key stocks in the BioHealth arena from drug to biotech shares.
King Pharmaceuticals, Inc. (NYSE: KG) has a couple of key events to watch for this week. King has earnings due on Thursday morning (Aug. 6). But there is also some unconfirmed buyout talk out there. We were doing our normal screens this morning, and Joe Kunkle of OptionsHawk.com pointed out to us some very unusual options activity in the stock. Kunkle noted some possible interest from Abbott Labs (NYSE: ABT) in the company. Oddly enough, as of almost Noon EST we now have almost doubled that activity in August Call Options at the $10.00 Strike Price. That volume now stands at 7,200 contracts versus a prior open interest of 2,789. We would note today that since it has just set earnings on such short notice that these could just as easily be option bets around the earnings since those options do not expire until August 21.
Also seen this morning was unusual options activity in Wyeth (NYSE: WYE). While this was large enough to flag a highly unusual options alert, it may have been nothing more than a close-out or reversal of a bet on the price in the Pfizer Inc. (NYSE: PFE) merger.
Over the weekend, we noted at 247wallst.com Genzyme Corporation (Nasdaq: GENZ) saw a huge amount of trading in the AUGUST $50.00 PUTS, where more than its entire open interest traded, and share were at risk of hitting 52-week lows. Those levels look to have been hit this morning when shares hit $49.62. They have since come back to $50.00. Interestingly enough, the options bets have dried up in Genzyme. This remains one of the most key biotech issues to watch for the weeks ahead after the FDA issues have taken out so much value measured in market cap. This is down 10% in just the last three sessions.
Human Genome Sciences, Inc. (NASDAQ: HGSI) is also showing some unusual options trading, although this is easy to explain. It has raised cash and has made a huge run higher. We do not consider this to be a fortune telling event that has promise of a repeat based only on options trading. But here is a snapshot of that volume as of 12:00 PM EST for the AUGUST-2009 CALLS:
Strike. Volume Op. Int.
$12.50.. 1,356 8,560
$14.00.. 1,775 2,259
$15.00.. 2,864 11,418
$16.00.. 2,623 2,096
$17.50.. 4,119 6,843
Stay tuned, we are just about to release our next round of potential merger candidates in Biotech and Drug shares…..
JON C. OGG
AUGUST 4, 2009
Using Stock Options in BioHealth Stock Screen (KG, ABT, WYE, PFE, GENZ, HGSI)
Whether it is mergers, earnings, or just plain vanilla hedging, it seems there is quite a bit of unusual activity in options trading. We have seen this in many key stocks in the BioHealth arena from drug to biotech shares.
King Pharmaceuticals, Inc. (NYSE: KG) has a couple of key events to watch for this week. King has earnings due on Thursday morning (Aug. 6). But there is also some unconfirmed buyout talk out there. We were doing our normal screens this morning, and Joe Kunkle of OptionsHawk.com pointed out to us some very unusual options activity in the stock. Kunkle noted some possible interest from Abbott Labs (NYSE: ABT) in the company. Oddly enough, as of almost Noon EST we now have almost doubled that activity in August Call Options at the $10.00 Strike Price. That volume now stands at 7,200 contracts versus a prior open interest of 2,789. We would note today that since it has just set earnings on such short notice that these could just as easily be option bets around the earnings since those options do not expire until August 21.
Also seen this morning was unusual options activity in Wyeth (NYSE: WYE). While this was large enough to flag a highly unusual options alert, it may have been nothing more than a close-out or reversal of a bet on the price in the Pfizer Inc. (NYSE: PFE) merger.
Over the weekend, we noted at 247wallst.com Genzyme Corporation (Nasdaq: GENZ) saw a huge amount of trading in the AUGUST $50.00 PUTS, where more than its entire open interest traded, and share were at risk of hitting 52-week lows. Those levels look to have been hit this morning when shares hit $49.62. They have since come back to $50.00. Interestingly enough, the options bets have dried up in Genzyme. This remains one of the most key biotech issues to watch for the weeks ahead after the FDA issues have taken out so much value measured in market cap. This is down 10% in just the last three sessions.
Human Genome Sciences, Inc. (NASDAQ: HGSI) is also showing some unusual options trading, although this is easy to explain. It has raised cash and has made a huge run higher. We do not consider this to be a fortune telling event that has promise of a repeat based only on options trading. But here is a snapshot of that volume as of 12:00 PM EST for the AUGUST-2009 CALLS:
Strike. Volume Op. Int.
$12.50.. 1,356 8,560
$14.00.. 1,775 2,259
$15.00.. 2,864 11,418
$16.00.. 2,623 2,096
$17.50.. 4,119 6,843
Stay tuned, we are just about to release our next round of potential merger candidates in Biotech and Drug shares…..
JON C. OGG
AUGUST 4, 2009
King and Pain Therapeutics see slight FDA setback (KG, PTIE, DRRX)
King Pharmaceuticals (KG) and Pain Therapeutics (PTIE) on Tuesday said they expect to resubmit their new drug application for their controlled-release oxycodone pain medication called Remoxy in mid-2010, slightly later than anticipated.
There was a hope, if not an expectation, after a meeting last week that the FDA might allow the drug to come to market a bit faster by maintaining tight control of the number of patients that could get a prescription for it, and the desire to get a product in the market that may reduce the risk of illegal oxycodone use.
King in a press release said last week’s meeting gave the company a “clear path forward” to resubmit the new drug application for Remoxy. As anticipated, the company will have to generate six-month stability data. No new clinical trials are required.
The news is likely to be seen as a slight disappointment for King, which has seen a flurry of FDA-related announcements in recent weeks, including an FDA-imposed delay in bringing an immediate-release version of oxycodone to the market called Acurox.
Next up is an FDA Advisory Committee review of its drug CorVue, expected later this month, which is meant to allow stress imaging tests for coronary artery disease patients who can’t perform a heart stress test.
This morning’s announcement on Remoxy may also affect shares of Durect Corp (Nasdaq: DRRX), as the formulation is partly based on Durect’s Oradur sustained-release technology. — Mike Tarsala
