Biotech Stock Booming on Pfizer's Blunder

Banning private healthcare was a hot topic at the Dem debates, causing UNH to slip

by Lillian Currens

Published on Jun 28, 2019 at 3:03 PM
Updated on Oct 16, 2019 at 2:50 PM

The Dow is trading higher today, as financial stocks get a boost after the Fed's annual stress tests. Several individual stocks were making news too, including Sarepta Therapeutics Inc (NASDAQ:SRPT) and UnitedHealth Group Incorporated (NYSE:UNH). Here's a look at what's moving the shares of SRPT and UNH.

Sarepta Stock Surges on Pfizer's Gene Therapy Disaster

Biotech concern Sarepta is eyeing its best day in over a year, up 16.8% to trade at $151.52, after an early-stage study of competitor Pfizer's (PFE) Duchenne muscular dystrophy (DMD) drug in six patients put two in the hospital. After the news dropped, William Blair added that Sarepta is the "clear leader" in the race to develop a gene therapy treatment for DMD, and Cantor Fitzgerald said the company's gene therapy "remains [the] most compelling" and its "safety profile remains the cleanest." 

Now, SRPT is trading back near February's highs, and headed for a three-day win streak. This positive price action has options bulls taking notice, with 18,000 calls across the tape so far -- six times the average intraday volume. Much of this action is taking place at the weekly 7/5 150-strike call, with positions likely being bought to open. This means traders are betting on even more upside for SRPT before the contract expires next week. 

Democratic Debate Has UNH Stock Slipping

The shares of UNH hit one-month lows earlier today, bottoming out at $238.65, after last night's debate between Democratic presidential hopefuls brought up the abolition of private healthcare coverage in favor of "Medicare for All." Currently, Senators Kamala Harris and Bernie Sanders are the only two in favor of the plan. Former Vice President Joe Biden favors Obamacare, naturally. In any case, shares of the insurance concern are now 1.3% lower at $243.12.  

Since UNH hit an annual low of $208.07 on April 17, the stock has staged an impressive rebound, but quickly ran at out steam at the $250 level and its 200-day moving average. Now, the equity is trading just below its year-over-year and year-to-date breakeven.

Today's dip has some options bears coming out of the woodwork, with 12,000 UNH puts on the board -- two times the norm. The most popular of these is the weekly 6/28 242.50-strike put, which expires at the closing bell today.


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