Puma Biotechnology, Inc. (PBYI) Sell-Off Rewards Option Skeptics

Puma Biotechnology Inc (NYSE:PBYI) is reeling today, possibly on concerns about its cancer drug's side effects

by Alex Eppstein

Published on Jun 1, 2015 at 2:59 PM
Updated on Jun 24, 2020 at 10:16 AM

Skepticism has been running high in Puma Biotechnology Inc's (NYSE:PBYI) options pits for some time. The drugmaker's 10-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 3.07 -- with long puts more than tripling calls. What's more, this ratio is perched just 8 percentage points from a 12-month high.

Echoing this skepticism is PBYI's Schaeffer's put/call open interest ratio (SOIR) of 1.80. Not only does this SOIR indicate short-term put open interest nearly doubles call open interest, it also sits in the 90th percentile of its annual range.

These bearish bettors are in luck today, as PBYI's taken a 10% tumble to trade at $175.64 -- and landed on the short-sale restricted list. The shares were also temporarily halted earlier. Potentially pressuring the stock was news that nearly 40% of patients treated with PBYI's breast cancer drug neratinib developed severe diarrhea.

This isn't the first time the cancer treatment has weighed on the shares. PBYI gapped sharply lower on May 14 following the results of another neratinib trial. With today's losses, though, Puma Biotechnology Inc (NYSE:PBYI) is now sitting 7.2% below its year-to-date breakeven mark. Off the charts, the company will hold its investor/analyst meeting this evening.

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