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.
As the day of reckoning for Biogen Inc.'s (NASDAQ:BIIB) controversial Alzheimer's product candidate aducanumab draws close, an analyst at Oppenheimer looked at the implications of the binary event for the company.
The Biogen Analyst: Analyst Jay Olson has an Outperform rating on Biogen with a $325 price target.
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The Biogen Takeaways: The Food and Drug Administration is scheduled to rule on Biogen's aducanumab biologic license application by the June 7 PDUFA date.
Oppenheimer sees equal probabilities of aducanumab receiving approval or facing rejection, Olson said in a note.
The shares are likely to move 21% higher if the FDA hands down a positive verdict or 11% lower on the receipt of a complete response letter, he said.
This equates to a probability-adjusted expected move of over 5% for Biogen shares based on Oppenheimer's model assumptions and implied volatility, Olson said.
The analyst sees the binary event as a "high-risk/reward" catalyst.
"Our 50% POS estimate reflects the deep controversy surrounding aducanumab's potential for FDA approval."
This is based on the assumption that uptake is only in APOE4 carrier patients with mild Alzheimer's disease; the annual U.S. net price is $30,000; and peak market penetration is around 12%, the analyst said.
The risk-adjusted peak sales forecast for aducanumab is about $2.7 billion in 2030, according to Oppenheimer.
BIIB Price Action: At last check, Biogen shares were down 0.93% at $278.39.
Related Link: Attention Biotech Investors: Mark Your Calendar For May PDUFA Dates
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.