Biopharma Stock Gaps Lower After Trial Disappoints

Put traders are targeting AZN in response

Deputy Editor
Jul 3, 2023 at 10:53 AM
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AstraZeneca PLC (NASDAQ:AZN) is gapping lower today, after the biopharmaceutical name's lung cancer drug disappointed investors in a late-stage trial. At last glance, AZN was down 7.2% at $66.41 and trading at its lowest levels since March. Currently down over 2% year-to-date, the security is also breaking below support at its 120-day moving average.

Options bears are chiming in after the news, with 25,000 puts exchanged so far, which is six times the amount typically seen at this point. The weekly 7/7 70-strike put is the most active contract, followed by the 71-strike put in that series.

The options pits were already bearish before these results. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.31 sits higher than 80% of readings from the past year. 

The majority of analysts are optimistic on AZN. Of the 10 in coverage, eight carry a "buy" or better rating, while the 12-month consensus price target of $80.25 is a 20.9% premium to current levels. In other words, a round of downgrades and/or price-target cuts may be on the horizon.




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