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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: C.Carlos who wrote (9649)	8/22/2006 11:32:19 AM
From: tuck	Read Replies (3) \| Respond to of 10280

Interestingly, all the action seems to be on the call side with NBIX September options. The ratio of open interest of calls to puts is about 8:1. For SEPR options, the ratio is more like 4:5. Meanwhile, NBIX options' implied volatility is high, but not hugely so given the importance of the event for NBIX. SEPR options definitely have higher IVs than usual. I sold some SEPR puts yesterday. The stock is down a half point but my September puts have hardly budged. Meaning some IV has gone out of them since yesterday. Taking the conflicting options data together, I can't make much prognostic sense of it. Options based crystal ball gazing aside, my feeling is that Indiplon will be required to go through more trials, and that will probably kill it, as it will delay it by about two years. In the meantime, the sleep market seems to have plateaued, perhaps because of those somnambulism reports. Perhaps behavior modification is taking share, too. That lagged pill sales because docs don't advertise with the same might that largish corporations do. I'll trust Pfizer's judgement here. Not betting directly against NBIX, though I am tempted, but betting for SEPR in expectation of NBIX failure on Indiplon. Nevertheless, I'm considering an offsetting position in NBIX calls, which, due to the lower stock price, would cost half as much as the puts I sold. That would make dealing with the sold SEPR puts a lot easier to take should NBIX get lucky, at the cost of half my sold put profits if NBIX does not get lucky. Just my very humble opinion. I've followed them for several years, but others have followed SEPR and NBIX longer and more closely. Any of you others got a strategy here? Rocky, Robo, I know you guys are options players, too. Fess up. Cheers, Tuck