ACUR drops heavily on drug approval?!
Acura Pharmaceuticals' (ACUR) abuse-deterrent analgesic, Qxecta (previously known as Acurox), was granted marketing approval by the FDA last Friday evening (6/17). Since the approval was somewhat of a surprise to a lot of investors (myself NOT included - see first ACUR post), shares gapped up from Friday's close of $3.87 to Monday's open of $6.44, reaching a peak of $6.80 (52-week high). However, it did not take long for ACUR to come crashing back down, bleeding 34% on the same day that the stock jumped on approval. Today, the loss continued for ACUR, which declined another 9.33% to settle at $4.08; remember the post-approval peak was $6.80!!! While many are astonished by the turnout of the stock movement, this was in fact an expected fate of small cap biotechs following an FDA approval (e.g. OPTR, SPPI, BMTI (panel)).
How I traded
As mentioned in my series of posts prior to ACUR's PDUFA, one of the most consistently profitable trading strategies that I frequently utilized to trade biotech catalyst events, including PUDFA, was Post-approval 'Slide'. Anticipating a quick slide in ACUR based on this strategy, I purchased put option contracts shortly after Monday's open while ACUR first jumped. The major sell-off in ACUR quickly boosted the price of these put options, gaining 77% in 2 days (July $5 puts: IN $.65, OUT $1.15). Throughout this time, I was posting comments and trading updates on Twitter, providing ideas for those also interested in biotech stocks and options trading. I will continue to do this - feel free to follow me on Twitter (@michaeljuan01) for biotech trading ideas.
Congratulations to all who also profited from the Post-approval 'Slide' strategy!!!
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