Trader bets against ImmunoGen rebound

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Small-cap drug developer ImmunoGen got crushed by a regulatory decision last week, and one big trader thinks it won't rebound this year.

IMGN optionMONSTER's tracking system detected the sale of  more than 5,000 January 7.50 calls for $0.35 against open interest of just 226 contracts. The transaction pushed total options volume in the stock to 18 times greater than average.

The trade occurred in late morning with IMGN down $0.05 from Monday's close. It immediately dropped and continued lower, ending the session down 5.62 percent to $5.34.

On Aug. 27 the Food & Drug Administration rejected a request to fast-track a license application for the cancer treatment trastuzumab-DM1. The news caused IMGN to revoke its full-year guidance and drove the shares lower by 38 percent.

The stock has lost almost half its value since early May and is now trading at levels last seen in March 2009.

Tuesday's call sale represents a bet IMGN will remain below $7.50 through expiration. If the trader is correct, he or she will get to keep the premium.

The company is also scheduled to appear at four investor conferences between Sept. 13 and Sept. 20, which could potentially impact the share price. See its calendar of events for more details.

(Chart courtesy of tradeMONSTER)



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: IMGN

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