A couple high risk, high reward biotech pennies. (puts, market, buy)

[howard555]

Here is an interesting article that says sell the good FDA news, and then buy lower. It sure was true for VVUS.
Selling An FDA Approval: Recent Results - Seeking Alpha

[treasurekidd]

Arena wins FDA Advisory Panel approval for it's obesity drug Locarserin by a final vote of 18 yes, 4 no, and 1 abstain. Now I'm kicking myself for not buying more. Tomorrow should be interesting nonetheless.

[howard555]

Originally Posted by treasurekidd

Arena wins FDA Advisory Panel approval for it's obesity drug Locarserin by a final vote of 18 yes, 4 no, and 1 abstain. Now I'm kicking myself for not buying more. Tomorrow should be interesting nonetheless.

Let's have a contest.
What will the stock price close at tomorrow?

The Seeking Alpha link shows that a few stocks ran up before the news, only to sell off.

I think the stock will languish around $3.50, and wait for official FDA approval in late June (I think that is the date).

So, tomorrow, I am totally guessing the stock will close "under" $4.00.
The stock was $1.75 in late March, so it's up over 100%.

[howard555]

The stock just began trading in the last 30 minutes.
$6.80.
I cancel my under $4.00 by tomorrow 4pm.

[treasurekidd]

I'm thinking it will open at $6.50 - $7.25 and then trade up thru the morning, and settle back to and close around $7.00 or so. I'm giving it a few days, as this stock has a HUGE short position, and I'm hoping for a short squeeze of the next few days that should drive it up between $8 and $9. Take a look at how VVUS traded after their Feb 28th Adcom approval. I'm hoping ARNA mirrors close to the same percentages as VVUS did over the following three days. My position was pretty small, so I'm not too worried about it. We'll see I guess. What's the next one to follow leading into a review date?

[howard555]

Originally Posted by treasurekidd

I'm thinking it will open at $6.50 - $7.25 and then trade up thru the morning, and settle back to and close around $7.00 or so. I'm giving it a few days, as this stock has a HUGE short position, and I'm hoping for a short squeeze of the next few days that should drive it up between $8 and $9. Take a look at how VVUS traded after their Feb 28th Adcom approval. I'm hoping ARNA mirrors close to the same percentages as VVUS did over the following three days. My position was pretty small, so I'm not too worried about it. We'll see I guess. What's the next one to follow leading into a review date?

TLON May 13
ARIA June 5
XNPT June 9
ONXX June 20
RGEN June 21
ARNA June 27
BMY June 28

[treasurekidd]

I'm looking closely at XNPT. Any thoughts on AMRN? PDUFA date of 7-26 and significantly off it's highs.

[howard555]

ARNA $7.21 afterhours with a high today of $7.01. Now under $5.80.

Before the news, the at the money calls, and puts, were about $1.00 or close to 33% of the stock price. They have collapsed from about a dollar to under 40 cents. The air was let out of the bag.

If you think long term, you can buy the Jan. 2014 $5.50 calls for about $2.50. Not a bad price for 20 more months, but breakeven is $8.00, or a big move up, long before Jan. 2014.

I'd have to look at news on AMRN. I followed it when it was far higher than now.

[howard555]

AMRN:
way last year when the stock went from $7 to $20, the CEO said he might consider a takeover at $30 or more. He kept saying on every interview, that there were more people wanting to but the company than he even had employees. So, he was pumping a takeover. Well, it fell back to $6.00 back in early Jan. Now the takeover chatter again. No FDA until late July.

Glaxo's fish oil drug is approved and only reaches 2% of the population.
One recent story said AMRN's oil would reach 10 times that many.

Amarin Fish Oil FDA Approval Decision Date: July 2012.

[la60336]

Anyone in CBRX?