From THESTREET.COM:
Options Buzz: Biotech Options Pick Up Again as
FDA Hearings Approach
By Dan Colarusso
Staff Reporter
1/20/98 5:28 PM ET
Three weeks ago, tiny biotech outfits Organogenesis (ORG:AMEX) and Advanced Tissue Sciences (ATIS:Nasdaq) were stirring in the options markets in anticipation of a Jan. 29 Food and Drug Administration advisory panel meeting.
With the Jan. 29-30 meeting of the FDA's General and Plastic Surgery Devices advisory panel looming, that biotech brew is bubbling again and sending the price of the companies' shares and their accompanying options even higher.
The implied volatilities on their options, traders'call volume is tilting toward speculative plays on the upside. Experts contend that there is little chance of actual inside information leaking from the FDA to the brokerage community and that the options speculation leading up to the meeting is more akin to educated guessing.
Advanced Tissue Sciences implied volatilities climbed to 120 from the 80 range, according to Paul Foster, options strategist at TheMarketEdge.com, in heavy afternoon trading. Volume on its February 15 calls was up over 1,000 contracts, with the premium rising 1/8 to 1 5/8. ATIS shares closed up 1 3/16 to 14 3/4 today. Advanced Tissue Sciences is hoping to get a positive panel recommendation on Dermagraft, a bioengineered living tissue for treating diabetic foot ulcers, wounds of diabetics who lose feeling and circulation in their feet.
Traders were treating Organogenesis as well, especially in deep out-of-the-money calls. More than 530 of the company's February 35 calls changed hands today against open interest of just 139. The February 25 calls, also out-of-the-money, traded more than 600 contracts today. Shares of Organogenesis, which is hoping for the approval its Apligraft leg ulcer treatment product, closed up 3 at 23 9/16 this afternoon. The implied volatility on Organogenesis climbed to 105 from its two-month average of 75, Foster said. |
