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.
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Citron Research, the notable short-selling research firm, blasted AveXis in a report dated December 14. The firm believes the stock is the "next biotech blowup," and the stock could plummet to $9 per share over the next 12 months and $5 over the next 24 months.
According to the report, the short thesis against AveXis is simple: The company's "hopeful story of a cure for terminally ill babies is powerful enough to bring forth the worst of Wall Street's greed, which has the power to sell this story to investors despite the absence of real clinical data."
The report continued that AveXis' stock began trading for the first time in February at around $20 and rose to $36 in May. The company's therapy for the treatment of Spinal Muscular Atrophy (SMA) was granted a "Breakthrough Therapy" designation by the U.S. Food and Drug Administration (FDA) because SMA Type 1 really is a life-and-death condition.
However, the FDA's designation does not grant automatic validation of a drug candidate, and investors flocked to the stock looking for the next Sarepta Therapeutics Inc (NASDAQ: SRPT) after the stock soared 500 percent since January amid a "controversial and emotionally-driven FDA approval for a similarly rare indication ((Duchenne Muscular Dystrophy), despite questionable efficacy data for Sarepta's drug."
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Harsh Reality
The Citron report further pointed out that since AveXis' IPO in February, the company has not enrolled new patients nor has it delivered any clinical data that would prompt the FDA to approve its therapy.
Meanwhile, AveXis' main competitor, Biogen Inc (NASDAQ: BIIB) is "dominating the science behind a real treatment of treating Spinal Muscular Atrophy."
Specifically, Biogen along with its partner Ionis showed in August that its Nusinersen therapy met all primary endpoints in a Phase 2 study with no safety or tolerability concerns. The companies followed up in August with interim data from a Phase 3 trial that met its primary endpoint for both survival and motor milestone response.
"Meanwhile, AveXis stock is over twice the price of its initial offering despite shareholders biggest risk having become a reality: Nusinersen works, safely and effectively," Citron further argued. "It will most likely earn FDA and European approval. This is the worst possible news for AveXis shareholders."
AveXis Comments
Jim Goff, a spokesperson for AveXis, told Benzinga in a brief statement that Citron's report "'contains numerous inaccuracies, and we disagree with it completely."
At last check, shares of AveXis were up 3.43 percent at $51.83.
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.