Medarex (NASDAQ:MEDX) is seeing shares being hit by a research note where Banc of America initiated coverage with a "SELL" rating. This is a fairly thin volume stock in pre-market trading, but shares are down about 1% pre-market. If you will recall this is one of the Dendreon-esque biotech situations as far as stock options trading with a huge open interest and huge premiums for farther out options. The reason is because of the Bristol-Myers Squibb (NYSE:BMY) pending trial data for its melanoma partnership, and the open interest in Bristol-Myers stock options in JAN-08 is higher than any single other options contract out there.
If there has been some negative news out regarding the trials, it is an interpretation because the benchmark for the results is said to be quite low compared to other cancer and melanoma treatment candidates. The reason for pondering this is from negative research calls on the stock of late:
- 09/26/07 initiated with "Hold" at Jefferies & Co.
- 09/11/07 initiated with "Underperform" at RBC Capital Markets.
- 09/10/07 downgraded to "Neutral" at Susquehanna Financial.
Jon C. Ogg
October 17, 2007