BLUE Brings Back Treatment From Marketing Suspension

The stock experienced a steep bear gap related to this suspension in February

Assistant Editor
Jul 9, 2021 at 10:36 AM
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The shares of bluebird bio Inc (NASDAQ:BLUE) are higher today, on news that the biotech company is lifting its voluntary marketing suspension of its gene therapy treatment, Zynteglo. The drug, which treats a rare blood condition, received a positive recommendation from a European regulator, which says its benefit-risk balance remains favorable. BLUE is up 1.5% to trade at $30.90 at last check. 

The stock has struggled to climb back up the charts after its steep mid-February bear gap, which occurred after the company placed its sickle cell disease treatment LentiGlobin on temporary suspension following a serious adverse reaction, and suspended Zynteglo as it is made with the same component. However, the stock appears to have found a floor at the $30 level, though long-term pressure at the 120-day moving average still looms. Year-to-date, the equity is down 28.6%. 

Analysts are mostly hesitant toward BLUE, with 11 of the 14 in coverage carrying a "hold" rating, with three at a "strong buy." Meanwhile, short interest makes up 8.1% of the stock's available float, or over four days' worth of pent-up buying power. 

The options pits, on the other hand, have been overwhelmingly bullish. This is per bluebird stock's 50-day call/put volume ratio of 22.67 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 92% of readings from the past year. 

It's also worth pointing out that BLUE ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 9 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.

 

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