Under The Hood Of Options Chain Implications — Understanding How Options Data Can Help Inform Investment Decisions By Mark Gilman, Benzinga
Hackensack, NJ
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September 21, 2022 08:00 AM Eastern Daylight Time
As many investors are aware, options market data can provide some critical insight into future price movements of underlying common stock. It’s often possible to tell how the broader market perceives a company by looking at how options traders are trading it.
As a refresher: A "call" or call option is a right to buy an asset at a predetermined price. If traders are buying more puts than calls, it indicates that they expect the price of the underlying security to go down. If they are buying more calls than puts, it suggests that they see a bull market ahead for the security.
But options data alone is typically not enough, and it’s always important to conduct one’s own fundamental analysis; for instance, in the pharmaceuticals industry, one could look at factors like upcoming biologics license applications (BLA) - these are usually submitted by companies developing vaccines and other allergenic drug products, blood products, and cellular and genetic therapies.
As an example, recent options data points could be helpful in understanding how traders feel about what the future may hold for Protalix BioTherapeutics Inc. (NYSE: PLX). This Israel-based pharmaceutical company focuses on developing, producing, and commercializing recombinant therapeutic proteins produced through its proprietary ProCellEx® plant cell-based protein expression system.
Momentum Toward Finding A Cure For Fabry?
Protalix received good news recently from its trial evaluation of the safety and efficacy of its Fabry disease drug compared to benchmark drug agalsidase beta (as part of what is referred to as the BALANCE trial). The study supported Protalix’s efforts to combat Fabry disease, which affects the heart, kidneys, brain, central nervous system, and skin. It is an inherited condition passed from parent to child and is sometimes called Anderson-Fabry disease.
Companies currently working on developing gene therapies for Fabry disease include Avrobio Inc. (NASDAQ: AVRO), Freeline Therapeutics Holdings PLC (NASDAQ: FRLN), and Sangamo Therapeutics Inc. (NASDAQ: SGMO).
Protalix Positive About Its Q2 Performance
Encouraged by the results of their trial, Protalix and its partner Chiesi Global Rare Diseases have announced new topline data from the study. Because the BALANCE trial met its primary endpoint and the drug showed favorable tolerability and immunogenicity profile, Protalix says it will be included in its planned BLA application to the Food and Drug Administration (FDA) by the end of 2022.
A BLA is a request to distribute a biologic across states. It is usually submitted after an investigational new drug or an investigational device exemption and after the appropriate studies have been conducted. A biologics license application generally applies to vaccines, allergenic drug products, blood products, and cellular and genetic therapies.
Resubmissions of BLA applications are made to answer any company deficiencies that need to be addressed by the applicant before approval.
The recent study results are one of the positive momentum examples pointed out by Protalix at the end of the second quarter of 2022, including a 36% increase in revenue to $8.8 million over results from the second quarter of 2021 and license revenue and research and development services up 69% to $5.4 million. A look at the options market data for Protalix could help investors understand how the broader market sees these factors impacting the company’s stock.
Traders who are unfamiliar with the complexity of options may want to take the dive into learning more to help round out indicators, especially for individual tickers like PLX — and even traders that are already used to observing the options chain, bid/ask spread, implied volatility, and more may want to take a deeper look at the implications of what the market is saying, such as expectations on clinical trials, financial results, and what the future may look like.
For more information on Protalix BioTherapeutics, visit www.protalix.com.
Protalix is a biopharmaceutical company focused on the development and commercialization of recombinant therapeutic proteins expressed through its proprietary plant cell-based expression system, ProCellEx. Protalix was the first company to gain U.S. Food and Drug Administration (FDA) approval of a protein produced through plant cell-based in suspension expression system. Protalix's unique expression system represents a new method for developing recombinant proteins in an industrial-scale manner.Protalix's first product manufactured by ProCellEx, taliglucerase alfa, was approved by the FDA in May 2012 and, subsequently, by the regulatory authorities of other countries. Protalix has licensed to Pfizer Inc. the worldwide development and commercialization rights for taliglucerase alfa, excluding Brazil, where Protalix retains full rights.Protalix's development pipeline consists of proprietary versions of recombinant therapeutic proteins that target established pharmaceutical markets, including the following product candidates: pegunigalsidase alfa, a modified stabilized version of the recombinant human α–Galactosidase–A protein for the treatment of Fabry disease; alidornase alfa or PRX–110, for the treatment of various human respiratory diseases or conditions; PRX–115, a plant cell-expressed recombinant PEGylated uricase for the treatment of severe gout; PRX–119, a plant cell-expressed long action DNase I for the treatment of NETs-related diseases; and others. Protalix has partnered with Chiesi Farmaceutici S.p.A., both in the United States and outside the United States, for the development and commercialization of pegunigalsidase alfa.
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Chuck Padala, Managing Director- LifeSci Advisors
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