95% of chance Vivitrol will be approved on the 12th Oct.The price will be no less than $17.50. 80% of chance Bydureon will be approved on the 22nd Oct. The price should be traded between $20.00 to $21.00.
I rarely trade Biotech's because of their "binary" nature but ALKS has been a great one for me so far. Can I ask you how you are forecasting the two price moves? Is this standard in the Biotech space...they will make a move after the first approval and then a second move after the second approval? I've just seen a few people here explaining an increase in price in two "separate" moves contingent upon the two approvals coming up in October...just curious and thanks for your posts.
ALKS looks like it is just getting started...and could be a bigger winner for 2010 AND 2011!!!
Be careful listening to price "forecasts" from other shareholders. Usually, they can only see in one direction - UP, and up as high as the eye can see. This is called "Confirmation Bias" http://en.wikipedia.org/wiki/Confirmation_bias#In_finance Try to ignore price targets from other shareholders, do your own DD, look at the charts and be objective. The market is going to give you what it feels like giving you, regardless of your target - even targets from analysts. A few months back a study was shown that stocks rated a "sell" were outperforming stocks rated "buy". From my experience with this type of FDA play - the stock doesn't go very high on approval, because the market has been pricing it in (up 69% on the year), but you'll still make money. Do your DD on other charts of other FDA plays that had such a high chance of approval - I bet you'll be shocked as to what you'll find. Ones that come to mind right away are the FDA approvals of Onsolis, Trazodone, Pennsaid, Zevalin. Good luck to all!
I was thinking it won't move a lot, because yes, we all assume approval. But I am changing my mind. you still have 6 millions of stocks shorted. What would be the reason for shorts to keep ALKS after both approvals? With $500M assets, juicy royalties from Bydureon, and potential growth from Vivitrol, a B/O is really possible, so the company won't stay at market value of $1.5B. it would be to cheap.
You also have to add into that equation the Fed easying and the second possible drug approval coming on Oct 22nd. It's also Friday so many may be trying to buy in before next week. It's an unusual set of circumstances for sure. I see this hitting $16.00 today; currently only $.09 off that price as of right now.
I'm NOT sure if I understand your logic behind your numbers, but I hope your RIGHT ON. This stock looks like it's ready to take off, and if anyone is short this one, I would lining up my buy orders before I lost another 30%.
There are a lot of very good things going on with this company and it's finally getting priced into the stock...NEW 52 WEEK HIGH TODAY!!! It's these type of companies that I love holding in my portfolio...profitable trades with companies that truly help the human experience.