NEW DIRECTIONAL CALL PLAYS
Alkermes plc. - ALKS - close: 60.93 change: +1.55
Stop Loss: 57.25
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 833 thousand
Entry on January -- at $---.--
Listed on January 06, 2014
Time Frame: Exit PRIOR to February option expiration
New Positions: Yes, see below
Why We Like It:
Biotech stocks were not immune to the market's widespread sell-off today. Yet one stock was bucking the trend. That's biotech stock ALKS.
According to the company's marketing material, "Alkermes plc is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to develop innovative medicines that improve patient outcomes. The company has a diversified portfolio of more than 20 commercial drug products and a substantial clinical pipeline of product candidates that address central nervous system (CNS) disorders such as addiction, schizophrenia and depression. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and manufacturing facilities in Gainesville, Georgia and Wilmington, Ohio."
Investors want to see companies with a growing pipeline of drugs and ALKS certainly qualifies. Here is a list of treatments in various stages of clinical trials at ALKS
current pipeline .
The stock's jump today was thanks to a press release issued this morning.
Here's an excerpt from ALKS' press release:
[ALKS] today announced topline results from FORWARD-1, one of a series of supportive clinical studies in the comprehensive FORWARD phase 3 pivotal program for ALKS 5461, a once-daily, oral investigational medicine with a novel mechanism of action for the adjunctive treatment of major depressive disorder (MDD). The FORWARD-1 study was designed to evaluate the safety and tolerability of two titration schedules of ALKS 5461. In addition, the study assessed the efficacy of ALKS 5461 over an eight-week period, compared to baseline, in patients with MDD.
...significantly reduced depressive symptoms from baseline starting at Week One and continued to the end of the treatment period at Week Eight...
If this treatment gets approved by the FDA it could be huge. According to a Thomson-Reuters article, depression is a massive opportunity going forward. Almost 350 million people worldwide suffer with depression and it's the leading cause of disability in the world. As more and more healthcare systems around the world get better at diagnosing depression it's going to drive demand for treatment.
Jim Cramer, on CNBC, mentioned ALKS this morning and commented on the company's press release about this new depression drug.
Technically shares have been showing relative strength the last few days and ignoring the market's sell-off. Today's breakout past resistance at $60.00 has also produced a new point & figure chart triple-top breakout buy signal with a $100 price target.
I am cautioning readers that biotech stocks are volatile. ALKS is no different. This is another higher-risk, more aggressive trade. The option spreads are pretty wide, which puts us at a disadvantage.
Tonight we are suggesting small bullish positions if ALKS can trade at $61.75. I would prefer to buy March calls since ALKS reports earnings in late February but March options are not available yet.
Trigger @ $61.75
- Suggested Positions -
Buy the Feb $65 CALL (ALKS150220C65) current ask $3.10
Option Format: symbol-year-month-day-call-strike