Early Edge: Galena, Horizon Pharma, AstraZeneca

The major market indexes are higher this morning, as traders keep a close eye on a strengthening dollar and digest some blue-chip M&A activity. Among the equities making an early splash on the Street are drugmakers Galena Biopharma Inc (NASDAQ:GALE), Horizon Pharma PLC (NASDAQ:HZNP), and AstraZeneca plc (ADR) (NYSE:AZN).

• GALE tumbled to a two-year low of $1.30 out of the gate -- and was last seen down 5.7% at $1.32. Pressuring the stock is news the Food and Drug Administration (FDA) issued a warning letter to the firm over an insufficient response to the agency's previous inspection of GALE's two drug treatments at a Portland facility. Today's negative price action is just more of the same for a stock that's shed roughly 63% of its value since hitting an annual high of $3.58 last June. While short sellers have been enjoying the spoils of this slide -- roughly 11% of the equity's float is sold short -- analysts have maintained a glass-half-full approach. In fact, five of those covering the shares have levied a "buy" or better rating toward Galena Biopharma Inc, compared to two that maintain a "hold" or worse.


• HZNP hit the $28.74 mark earlier -- its highest perch on record -- and was last seen up 4.3% at $28.50. Helping to boost the shares is a nod of approval from the FDA, which gave a fast-track designation to HZNP's experimental neuromuscular disorder drug, Actimmune. Year-to-date, the stock has more than doubled in value, and option traders have been quick to scoop up long calls. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day call/put volume ratio of 8.18 rests higher than 81% of similar readings taken in the past year. Today, calls are trading at three times what's typically seen at this point in the day, with speculators paying the most attention to Horizon Pharma PLC's May 24 strike.


• Finally, AZN was off nearly 2% at the open, but has since pared these losses to 0.7% to trade at $69.64, after the FDA said the firm's diabetes drug, Onglyza, could possibly increase the risk of death. Although shares of AZN have done little on the charts to warrant any fanfare -- off about 1% in 2015 -- today's decline has been contained by the equity's 40-day moving average, a trendline that has served as resistance for most of this year. Option traders have kept the faith, though, per AZN's 10-day ISE/CBOE/PHLX call/put volume ratio of 10.17, which ranks in the 92nd annual percentile. In today's trading, AstraZeneca plc calls are crossing the tape at three times the average intraday pace.