How Trial Results Are Moving These 2 Biotech Stocks

Biotech stocks ZIOPHARM Oncology, Inc. (ZIOP) and Novartis AG (ADR) (NVS) are making moves on the latest in breast cancer research

Oct 10, 2016 at 1:42 PM
facebook twitter linkedin

Several biotech stocks are making moves today following cancer drug trial results. Two of today's big biotech stocks making news today are ZIOPHARM Oncology, Inc. (NASDAQ:ZIOP) and Novartis AG (ADR) (NYSE:NVS), following new developments with their respective breast cancer treatments.

ZIOP's breast cancer gene therapy Ad-RTS-hIL-12 has shown a higher-than-expected incidence of cytokine release syndrome (CRS), a potentially fatal immune system reaction, in Phase 2 trials -- but testing will continue, with ZIOP calling the initial study results "promising." ZIOP is up 1.1% at $5.75 this afternoon, but the stock has traded on both sides of breakeven in today's session. ZIOP has lost 30.8% so far in 2016, and rally attempts have run into resistance around the $6 level in recent months.

In the option pits, ZIOP's October 6 call is the leading open interest position -- though at least a portion of this activity is of the sell-to-open variety. By selling to open the calls, option traders are expecting shares of ZIOPHARM Oncology, Inc. to stay at or below the $6 mark through front-month expiration. In fact, the concentration of option open interest around this strike could reinforce technical resistance for the shares during the short term.

On a more upbeat note, NVS over the weekend revealed the specifics of its ribociclib study results, which it had already deemed a success back in May. However, NVS is still down 0.9% at $77.61 so far for the day, after a price-target cut by Chardan Capital to $92 from $95.

NVS is down more than 18% from its October 2015 high north of $95 -- and short sellers appear to be taking some profits, with short interest down 16.3% over the last two reporting periods. This burst of short-covering activity may have helped Novartis AG (ADR) stage a short-lived bounce from the $78 level during the first several weeks of September, though NVS is now trading back at its lowest levels since late June.

Find out where the Dow lands right after the closing bell. Sign up now for Schaeffer's Market Recap


Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!