It appears biopharm stocks are hot, and getting hotter. Two of today’s most unusual, large option trades involve Amicus Therapeutics (NASDAQ:FOLD), and Alexion Pharmaceuticals (NASDAQ:ALXN).
Alexion Pharmaceuticals (ALXN)
First, a trader bought 1045 July $160 calls in Alexion Pharmaceuticals (ALXN) mostly at the ask at prices of $3.30 to $3.50 per call. This was an opening buy in the July 160 calls. The total value of this trader’s investment is around $365,000.
ALXN is up $5.07 today so far, to $161.37, so this investor is already up some on his investment as the bid is well over $4.00 currently. Given the state of biotechs, we think this could go much further yet.
Alexion Pharmaceuticals has traded from a low of 93.33 to a 52 week high of $185.43 this year, and has been on a nice run from $140 back in mid April. ALXN does announce earnings on July 21, so there is the possibility this trade was based on some positive numbers leaking out from that report.
Twenty one analysts rank this as a OVERWEIGHT rating, with a consensus price target of $193. So if you want to copy cat this, there is clearly room for more upward movement on the price. Analysts estimate Q2 earnings at $1.06 per share versus last quarters $1.53 per share.
Amicus Therapeutics (NASDAQ:FOLD)
The other interesting options trade was in FOLD today, when a trader bought 1304 August $5 calls at a range of 40 – 55 cents per call. The total cost to the investor was about $63,000. Not a big bet, but then again not a big company. It is unusual for this one to get this kind of attention.
Amicus is focused on treatments for lysosomal storage diseases and diseases of neurodegeneration, as well as Parkinson’s disease.
Trading in Amicus Therapeutics (NASDAQ:FOLD) is 11 time the average volume as the stock is up 24% or 79 cents to $4.12. The call buyer is clearly expecting some material news to drive this well over the $5.00 range before August.
FOLD has a 52 week trading range of $1.76 to today’s high of $4.30. The volume surge is related to its phase 3 trial plan announcement for its candidate migalastat. It also got a rating increase from JP Morgan to overweight and a price target of $7.00, so this trade looks like a solid one.
Given that the calls are still only at 55 or 60 cents, it may be a good time to jump in with a copycat trade on the August $5 calls. Or, if options make you nervous, it would still be a good time to jump into the common stock here, or wait for a little profit taking pullback to jump in to the common stock of FOLD.