Regeneron Pharmaceuticals Inc (REGN) Traders Active Amid CapEx Woes

Regeneron Pharmaceuticals Inc (REGN) is swimming in red once again, as the Street reacts negatively to the firm's capital expenditures guidance

by Alex Eppstein

Published on Jan 12, 2016 at 2:45 PM
Updated on Jun 24, 2020 at 10:16 AM

Another day, another rough session for biotechs. This time, Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is leading the way lower, staring at a 3.9% loss at $461.94. Apparently, Wall Street is none too pleased with the drugmaker's capital expenditures forecast, or with CEO Len Schleifer's remark that the company's drug pricing "needs balance." Option traders don't see things turning around soon, either.

Looking at REGN's intraday activity, options are changing hands at twice the usual rate. The January 2016 490-strike call is the most active option, and may be seeing sell-to-open activity. If this is the case, these short-term call writers believe the shares will settle the week south of $490, when the front-month options expire -- allowing the sellers to collect the initial premium received.

Longer term, call buyers have been out in force. REGN's 50-day call/put volume ratio of 1.17 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 90th percentile of its annual range. Similarly, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.20 sits in the bottom one-third of all readings taken in the past year.

Elsewhere, analysts are evenly divided toward REGN. While nine offer up "buy" or better ratings, another nine are sporting "hold" or worse recommendations.

As with most biotech stocks, Regeneron Pharmaceuticals Inc (NASDAQ:REGN) has hit headwinds in 2016. Today's losses bring the shares' year-to-date deficit to nearly 15%, and they're currently at risk of settling south of their 80-week moving average for the first time since November 2009.

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