Drug Stock Plunges 75% on Devastating Lung Disease Data

Brokerage firms are rushing to cut SVRA price targets

Jun 13, 2019 at 10:07 AM
    facebook X logo linkedin

    Savara Inc (NASDAQ:SVRA) stock is spiraling this morning -- down 75.4% at $2.60, tagging a record low of $2.55 out of the gate. This plunge comes after the Texas-based pharmaceuticals firm said Molgradex, its key pipeline drug to treat rare lung disorder autoimmune pulmonary alveolar proteinosis, failed to meet its main goals in a late-stage study, though secondary goals were met. CEO Rob Neville said SVRA is preparing to meet with the Food and Drug Administration (FDA) and European Medicines Agency (EMA) to "determine our options to seek approval."

    A round of bearish brokerage notes is only pouring salt on the proverbial wound, with Ladenburg Thalmann downgrading SVRA stock to "neutral" from "buy," and slashing its price target to $3 from $21. The brokerage firm said it believes Savara will need to run another study in order to gain approval from the FDA and EMA. Price-target cuts also came through at H.C. Wainwright (to $6) and Jefferies (to $10).

    Ahead of last night's data release, one trader may have initiated a collar strategy using SVRA's July 7.50 puts and 17.50 calls. If this is the case, they bought to open the puts and sold to open the calls to potentially lock in recent gains or limit risk on their portfolio in case of a negative reaction to the Molgradex results. Heading into today's trading, Savara stock was up almost 40% year-to-date.

    Today, options volume is running hot in early trading, albeit amid relative light absolute volume. At last check, 765 calls and 2,126 puts were on the tape, about nine times what's typically seen at this point. New positions are being initiated at the June 5 call, though it's not clear if they're being bought or sold.



    Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

    This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

    On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

    Start targeting gains like the ones our subscribers have seen recently, including:

    213.3% GAIN on AutoNation calls
    100.0% GAIN on Monster Beverage calls
    100.4% GAIN on Walgreens Boots Alliance puts
    100.4% GAIN on ON Semiconductor calls
    257.7% GAIN on Dell calls

    101.0% GAIN on Apollo Global Management calls
    103.6% GAIN on JP Morgan  Chase calls
    105.3% GAIN on DraftKings calls
    101.3% GAIN on Airbnb calls
    203.0% GAIN on Shopify calls
    102.0% GAIN on Cboe Global Markets calls
    100.9% GAIN on Boeing calls
    102.1% GAIN on Microsoft puts
    102.3% GAIN on First Solar calls
    101.5% GAIN on PulteGroup calls
    101.0% GAIN on Apple calls
    209.4% GAIN on NXP Semiconductors calls
    100.8% GAIN on Uber Technologies calls
    100.4% GAIN on Academy Sports and Outdoors puts
    102.2% GAIN on Trade Desk calls
    100.8% GAIN on DoorDash calls
    100.0% GAIN on Camping World Holdings puts
    100.0% GAIN on Cboe Global Markets calls
    100.2% GAIN on C3.ai calls
    238.5% GAIN on Oracle calls



    Rainmaker Ads CGI