Bellicum Pharmaceuticals Stock Jumps After FDA Lifts Clinical Hold

Elevated volatility expectations are being priced into short-term options on Bellicum

Managing Editor
Apr 12, 2018 at 9:47 AM
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Shares of stem cell specialist Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) are near the top of Nasdaq, surging in early trading after the Food and Drug Administration (FDA) lifted its clinical hold on the company's main cancer therapy, BPX-501. BLCM has since received one upgrade and no fewer than three price-target hikes. Most notably, Wells Fargo upgraded the stock to "outperform" from "market perform" and raised its price target to $23 from $6.

BLCM was up 14% at $7.81 at last check, gapping above its 80-day moving average, which had acted as resistance since October. Longer term, however, Bellicum shares have been trending lower, shedding 47% over the past 12 months, and touching a fresh record low of $5.02 on Jan. 31. Still, five of six covering brokerage firms say the shares are a "buy" or "strong buy."

Short interest fell by 15% during the last two reporting periods, but the 4.5 million shares sold short still represents almost 16% of BLCM's total available float. At the equity's average daily trading volume, it would take almost eight days for the shorts to cover their bearish bets.

It's getting expensive to buy premium on Bellicum stock, however. Its 30-day at-the-money implied volatility of 116.9% ranks in the 98th annual percentile, and its Schaeffer's Volatility Index (SVI) of 122% sits above 86% of all similar readings taken in the last 12 months. These two indicators suggest elevated volatility expectations are being priced into short-term options.

 

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