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
Vical milestone may eventually lead to more government funding (VICL)
Vical (VICL) announced this morning that has achieved second-year milestones under a 3-year, $6 million grant from the National Institutes of Health — a small step, but one that’s a potential gateway to Vical getting more government funding.
The company also said it’s still advancing with development of its RapidResponse system that it hopes will eventually be able to produce several million doses of vaccines quickly in the event of a pandemic.
While the continued NIH grant is a small dollar amount, it validates RapidResponse as a potential delivery system for vaccines that might protect against infectious diseases such as swine flu, bird flu, ebola, West Nile, SARS, or another yet-to-be-discovered pandemic threat.
Vical already has a partnership with the U.S. Navy to make a prototype DNA vaccine targeting swine flu; it would benefit strongly from additional government dollars that would help speed clinical development and boost potential vaccine production.
As advertised, the company’s delivery system’s major potential advantage is speed. The traditional method of making vaccines is to build a gigantic facility that grows viruses in chicken eggs or cell cultures for use in drugs. The Vical RapidResponse DNA vaccine process is cell-free, and in theory could help make hundreds of millions of vaccine doses in the early stages of a disease outbreak. There are also potential safety benefits, as the system doesn’t require injection of a live or partially-killed virus.
The delivery system has yet-to-be-tested in humans. But companies such as Novartis’ (NVS) Aqua Health have used Vical’s technology in farm-raised salmon, and Wyeth’s (WYE) Fort Dodge Animal Health Group have used a DNA-based vaccine technology in horses.
Full Earnings Season Expectations for Big Pharma (LLY, JNJ, MRK, PFE, WYE)
There is a fairly large expectation that drug companies will be one of the safer earnings plays in 2009. That will either be confirmed or will get thrown out the window as the drug giants report earnings over the next couple of weeks. We have giants such as Eli Lilly & Co. (NYSE: LLY), Johnson & Johnson (NYSE: JNJ), Merck & Co. (NYSE: MRK), Pfizer Inc. (NYSE: PFE) and Wyeth (NYSE: WYE) all coming out with earnings. We have compiled consensus estimates from Thomson Reuters (First Call) and given some of the pending issues and other developments inside each of these Big Pharma drug companies.
Read more
Full Earnings Season Expectations for Big Pharma (LLY, JNJ, MRK, PFE, WYE)
There is a fairly large expectation that drug companies will be one of the safer earnings plays in 2009. That will either be confirmed or will get thrown out the window as the drug giants report earnings over the next couple of weeks. We have giants such as Eli Lilly & Co. (NYSE: LLY), Johnson & Johnson (NYSE: JNJ), Merck & Co. (NYSE: MRK), Pfizer Inc. (NYSE: PFE) and Wyeth (NYSE: WYE) all coming out with earnings. We have compiled consensus estimates from Thomson Reuters (First Call) and given some of the pending issues and other developments inside each of these Big Pharma drug companies.
Read more
More Evidence Big Pharma Ready To Acquire Biotechs (MRK, PFE, WYE, GILD, BMY, LLY, SGP, CELG, GENZ, BIIB)
We have covered on numerous occasions about how the larger Big Pharma companies either need to or have signaled an openness to making acquisitions in the biotech sector or in the smaller drug companies. Today it was Merck & Co. (NYSE: MRK) out speaking and testing the waters to see how Wall Street would react if it decides to go make a decent buyout. The company said at a Goldman Sachs investor conference in New York that it has the resources to make to significant acquisitions.
Merck’s $62 billion market cap does not allow the company to go after ANY deal it chooses. Here were the estimated sizes of the drugs and biotech players we noted earlier this week when Pfizer was out testing the waters. Actually, these are the ones with market caps that are far enough under that of Merck:
Stock (Ticker) MktCap
Wyeth (WYE) $51.1B
Gilead Sciences Inc. (GILD) $47.5B
Bristol-Myers Squibb Co. (BMY) $47.3B
Eli Lilly & Co. (LLY) $46.1B
Schering-Plough Corp. (SGP) $28.2B
Celgene Corporation (CELG) $25.9B
Genzyme Corp. (GENZ) $18.4B
Biogen Idec Inc. (BIIB) $14.1B
Read more
Pfizer Tests Waters For Major Acquisitions (PFE, AMGN, WYE, GILD, BMY, LLY, SGP, CELG, GENZ, BIIB)
It hasn’t taken long for the speculation machine to roll down Wall Street in 2009. A report from the FT over the weekend shows that Pfizer Inc. (NYSE: PFE) is willing to acquire some large rivals. We believe that this is a mere testing of the waters by the company now that its troubles have been persistent, but we also gave a whole list of these stocks in pharma and biotech which we feel are large enough to make an impact at the company. You can see our full synopsis on this at 24/7 Wall St. and here is the list of the names we included:
Stock (Ticker) MktCap
Amgen Inc. (AMGN) $62.5B
Wyeth (WYE) $51.1B
Gilead Sciences Inc. (GILD) $47.5B
Bristol-Myers Squibb Co. (BMY) $47.3B
Eli Lilly & Co. (LLY) $46.1B
Schering-Plough Corp. (SGP) $28.2B
Celgene Corporation (CELG) $25.9B
Genzyme Corp. (GENZ) $18.4B
Biogen Idec Inc. (BIIB) $14.1B
JON OGG
January 5, 2009
Medical & Biotech Analyst Upgrades & Downgrades
Omnicare (OCR) Raised to Buy at Jefferies.
RehabCare (RHB) Raised to Outperform at Morgan Keegan.
Hansen Medical (HNSN) Cut to Neutral at Merriman Curhan Ford.
ImClone (IMCL) Cut to Hold at Citigroup.
Osiris Therapeutics (OSIR) Cut to Underperform at Jefferies.
Wyeth (WYE) Cut to Neutral at HSBC.
JON OGG
Wyeth & Elan: More Questions in Alzheimer's Study Results (WYE, ELN)
Today was the long awaited Alzheimer’s drug data presented from Elan Corporation, plc (NYSE: ELN) and Wyeth (NYSE: WYE). The companies presented detailed results from their 18-month Phase II study of bapineuzumab in patients with mild to moderate Alzheimer’s disease.
The study was on 234 randomized with findings reported on 229 patients, and efficacy was measured from a baseline of 78 weeks. The data looked very positive on the surface with safety and efficacy results supporting the design of an ongoing global Phase III program.
Some data is mixed and shares were hit as a result. It showed statistically significant and clinically meaningful effects were observed in multiple endpoints in ApoE4 non-carriers. The company also noted that pre-specified efficacy analysis did not reach significance in the total population.
Favorable directional changes were seen in some endpoints in ApoE4 carriers, warranting further study. The post-hoc anlysis showed statistically significant and clinically meaningful benefits in important subgroups.
You can read about the full results here. There were measurements of less or slower brain shrinkage combined with better memory test results observed in the study, and if our data is correct that would be superior to any existing treatments and is probably above other study reports to date.
The problem is the pre-specified efficacy analysis as well as a few deaths in the trial (which were noted as “unbelieved to be from the drug” despite no deaths in teh placebo group.
This data was shown at the Alzheimer’s Association’s International Conference on Alzheimer’s Disease 2008 in Chicago, Illinois.
Shares are getting slapped down in after-hours. Wyeth stock is down 8.5% at $41.25 and Elan stock is down 15% at $28.49 in after-hours trading. Both stocks had been higher initially ahead of the data. This looks more and more like mixed data, and unfortunately it looks like Alzheimer’s patients have a long way to go before even any meaningful help will arrive.
Jon C. Ogg
July 29, 2008 (5:45 PM EST)
JPMorgan Issues Coverage on Big Pharma Sector (BMY, LLY, PFE, WYE, MRK, SGP)
JPMorgan has come out with a relatively lackluster coverage in the Big Pharma sector, although not all calls are cautious.
Bristol-Myers Squibb (NYSE: BMY), Eli Lilly & Co. (NYSE: LLY), Pfizer Inc. (NYSE: PFE), and Wyeth (NYSE: WYE) were all started in new coverage with “Neutral” ratings.
Merck (NYSE: MRK) and Schering-Plough (NYSE: SGP) were started as “Overweight” in new coverage this morning.
Jon Ogg
June 25, 2008
Latest from 247Wallst.com- Latest from VSInvestor
- Exponential Volume Club (AKNS, BBI, FNM, FUQI, LSI, VIVO, PLCM, SNV, VHC, VLTR)
- Top Day Trader Alerts (ERIC, CIT, FUQI, GGP, PLCM, HOG, GE, ABK)
- Rumors Drive Volume (GGP, SPG, HOG)
- Stock/Option Explosion: The GE Breakout on 52-Week Highs (GE)
- Top Day Trader Alerts (ICGN, SQNM, MPEL, ATHN, BSX, MCHP, GE)
