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Biotech / Medical : biotech binary events

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From: tuck1/31/2018 10:30:15 AM
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Phase 3 results for Dermira's (DERM) acne treatment are coming up, likely by quarter end. There are other indications and programs in the pipeline, but this one is a large part of the valuation. Hence the implied volatilities in options ~200. I am cautiously optimistic, and established a bullish vertical put spread this morning. Do your own diligence if you're going to try this at home.

Not sure how this might affect Paratek, which already has results in and NDA submitted; it's IVs are much lower. Maybe not much, the risk for Paratek is now market risk, while Dermira's is clinical.

Cheers, Tuck
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