Unusual Options Activity, Mon 5/22/23

The following options are exhibiting notable trading, potentially indicating changing sentiment toward the underlying stocks, and/or potentially representing positioning for increased volatility.

Bullish Call Activity:

• MRSN Jul 10 calls (volume: 2230, open int: 0, implied vol: ~169%, prev day implied vol: 121%). 2K traded in a single transaction. Co will present at an ASCO conference on June 3. Co is expected to report earnings early August.
• SNDL May 2 calls are seeing interest with the underlying stock up 8% (volume: 5120, open int: 700, implied vol: ~108%, prev day implied vol: 80%). Co is expected to report earnings early August.
  
• Direxion Daily S&P Biotech Bull 3x ETF (LABU) May 7 calls are seeing interest with the underlying stock up 7% (volume: 2190, open int: 3820, implied vol: ~93%, prev day implied vol: 80%).

Bearish Put Activity:

• GPS May 7 puts (volume: 1870, open int: 180, implied vol: ~163%, prev day implied vol: 130%). Co is confirmed to report earnings May 25 before the open.
• QRTEA Jun 1 puts (volume: 1250, open int: 0, implied vol: ~130%, prev day implied vol: 108%). 1950 contracts traded in a single transaction. Co is expected to report earnings late July.
  

Sentiment: The CBOE Put/Call ratio is currently: 0.90, VIX: (17.04, +0.23, +1.4%).
June 16 is options expiration -- the last day to trade June equity options.

=Incyte (INCY) and Merck (MRK) : failed key Phase 3 melanoma study

• Biotech stocks (XBI) lower after important immune-oncology combo data (Incyte's IDO inhibitor plus Merck's Keytruda) fails in key Phase 3 melanoma study:  NLNK (IDO inhibitor peer) -37.57%,  INCY -18.23%,  NKTR -9.84%,  JNCE -10.20%,  LABU -5.14%,  FPRX -3.84%,  ONCS -3.72%,  SAGE -2.21%,  SGEN -1.81%,  BLUE -4.85%,  PBYI-1.85%,  SPPI -2.46%,  CRVS -9.17%,  TSRO +0.37%,  BMRN -2.01%, GLYC-2.03%, MRK-1.19% 
• IBB -1.99%,  XBI -1.78%

Incyte announces that the External Data Monitoring Committee determined that the Phase 3 ECHO-301/KEYNOTE-252 study did not meet the primary endpoint 

The co and Merck (MRK) announced that an external Data Monitoring Committee review of the pivotal Phase 3 ECHO-301/KEYNOTE-252 study results evaluating Incyte's epacadostat in combination with Merck's KEYTRUDA in patients with unresectable or metastatic melanoma determined that the study did not meet the primary endpoint of improving progression-free survival in the overall population compared to KEYTRUDA monotherapy.

• The study's second primary endpoint of overall survival also is not expected to reach statistical significance. Based on these results, and at the recommendation of the eDMC, the study will be stopped. The safety profile observed in ECHO-301/KEYNOTE-252 was consistent with that observed in previously reported studies of epacadostat in combination with KEYTRUDA.

Incyte and Merck will inform investigators of the results and work with investigators to appropriately conclude the study in a manner consistent with the best interests of each patient. Data from this study will be analyzed and submitted for presentation at an upcoming scientific congress.

=Long trade : LABU +20% (8/17)

• 8/22:  #4    vol. 1.1 M