Pharma Stock Eyes Best Day Ever On FDA Backing
Pharmaceutical name Biogen Inc (BIIB) is on its way higher this afternoon, last seen up an impressive 40%, to trade at $345.05. Sending the equity toward its best daily percentage gain ever is news that the Food and Drug Administration (FDA) has backed Biogen’s Alzheimer’s drug aducanumab, saying it’s proven effective in a large trial. The FDA also suggested a similar outcome could be prevalent with Eli Lilly’s (LLY) donanemab, as both target the amyloid protein in the brain.
On the charts, BIIB has struggled this year, but has still managed to tack on a 16% year-to-date lead. Plus, with today’s outperformance, the equity is the closest it’s been to overtaking its early February highs, and is eyeing its first close above the 200-day moving average since Aug. 10.
Analysts are leaning bearish heading into today’s trading, with 17 of the 24 covering brokerages sporting a tepid “hold” or worse recommendation. Further, the stock’s average 12-month price target of $289.66 comes in at a 16.3% discount to current levels.
Lastly, long term, the options pits are leaning toward puts. This is per BIIB’s 50-day put/call volume ratio of 1.02 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks just 3 percentage points from an annual high, meaning put buying has outpaced call buying in the last 10 weeks.