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.
Johnson & Johnson (NYSE: JNJ) has reportedly abandoned its buyout bid for Actelion Ltd (OTC: ALIOF).
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Johnson & Johnson said that is was unable to come to terms on a deal that the company believes would have created adequate value for shareholders. Actelion is now reportedly involved in buyout talks with Sanofi SA (ADR) (NYSE: SNY).
However, just because Johnson & Johnson is abandoning its efforts for Actelion doesn’t mean it is changing strategies. Actelion is a major player in the relatively small pulmonary arterial hypertension (PAH) treatment market. The condition affects only about 100,000 patients in the United States and Europe.
Focusing In On Peers
Johnson & Johnson could now shift its attention to one of the other names in the space. Private biotech companies like MORPHOGEN-IX and Reviva Pharmaceuticals are working on treatments.
In the public market, Eiger Biopharmaceuticals Inc (NASDAQ: EIGR), Bellerophon Therapeutics Inc (NASDAQ: BLPH) and Reata Pharmaceuticals Inc (NASDAQ: RETA) are also active in the PAH market.
Johnson & Johnson may not have gotten a price it liked for Actelion, but any of the names mentioned above would be far cheaper alternatives. Actelion’s market cap is currently $22.3 billion. Eiger, Bellerophon and Reata have $94.4 million, $16.3 million and $455.1 million market caps, respectively.
The market seems to think Reata could be the best plan B for Johnson & Johnson. Shares are surging 7.6 percent on Wednesday.
Image Credit: By Raysonho @ Open Grid Scheduler / Grid Engine - Own work, CC0, Wikimedia Commons27% 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.