Steve, I disagree ( would you expect anything else from me?).
The advisory committee meeting and the approval of myotrophin are two related, but separate things. The company is primarily betting on the approval of myotrophin with their options play, but the disparity lies in their choice of time frame for their options "bet". If they were solely betting on the outcome of the advisory meeting, they would have been best to purchase May calls. Since they knew in advance of the meeting that a final decision on myotrophin would be made before August expiration, they would have purchased August calls if betting on FDA approval of myotrophin was their only objective.
Instead they pay more for the November options, and it would seem to me they have further reasonings to want that time frame for stock appreciation other than the FDA and myotrophin, including European myotrophin approval and modafinil. Also they had to purchase these options prior to the advisory meeting so they would have them in hand in the event of a positive outcome to the meeting, which would have created a major appreciation in stock and option value. In this scenario, they would have missed out on their chance to obtain the capital gain they are looking for if they had waited until after the meeting to purchase options. |
