27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
CARDIOME PHARMA CORP (NASDAQ:CRME) announced Tuesday it has agreed to divest its Canadian business to Cipher Pharmaceuticals for the U.S. dollar equivalent of $19.7 million.
The Analyst
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Canaccord Genuity's Dewey Steadman maintains a Buy rating on Cardiome's stock with an unchanged $5 price target.
The Thesis
Cardiome's sale of its Canadian business includes on-market Brinavess and Aggrastat and is complemented by the Xydalba and Trevyent pipeline projects, Steadman said in a Tuesday note. (See the analyst's track record here.)
Cardiome will form a new company named Correvio and will net the $19 million in cash, which would boost its estimated cash balance to around $40 million, the analyst said. The cash on hand should prove to be sufficient to finance the pharma company's operations through at least 2019, if not longer, he said.
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The divestiture is also an "attractive way" for Cardiome to finance its near-term business development without "sacrificing much upside," given the company's approximately $77,000 in revenue in 2017, the analyst said.
In return, Cipher likely accepted the transaction as it includes Cardiome's roughly $232.5 million in Canadian tax losses that Cardiome would never fully utilize itself.
Cardiome's deal is viewed favorably within the "often-overlooked" specialty pharmaceutical market outside of the U.S, Steadman said.
Price Action
Shares of Cardiome Pharma were up 3.35 percent at the close Wednesday.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.