Biotech Values

[Rocky3]

I’m not sure I agree that a slow and steady rise is more likely than an abrupt rise; several kinds of events could result in the latter:

1. FDA approval of generic Copaxone.

2. A partnership deal for M118.

3. A partnership deal for an FoB program.

4. A partnership deal for M402.

5. Formal FDA rejection of Teva’s Lovenox ANDA (unlikely, but possible).

6. A buyout offer at a large premium.

Because the timing of the above events is difficult to predict, I think the best approach to MNTA is to dispense with buying or selling options and to simply own the stock. However, simply being long the stock is apparently not exciting enough for some of the readers on this board.

I don't think any of things mentioned are that likely, and surely none of them are likely to move the price as much as approval of mEn did - and we saw how long that lasted.

As already pointed out, the volatilities are high and have been for years. I have not found any other stock that has maintained such high volatilities for such a long time - at least 4 1/2 years. And the stock price has not really moved that much (at least in my opinion, since it was over 20 in early 2006). It has been far more profitable taking advantage of that volatility by selling covered calls or puts (as pointed out, probably an inefficient market opportunity), than owning the stock. Will it be in the future? None of us really knows, just like we don't really know when (if ever) tEn will be approved.

After primarily playing the volatility by selling puts for years, I am now very long the stock too. But still selling puts and a few covered calls too. Luckily, the prior profits have funded a lot of the current long position. Having not collared the long position, so I am very exposed to tEn approval possibility. If we get to mid 20s (either slowly or fast), will look to collar. Biggest single current option position is in ratio spread calls of 20 and 25 due in March. So I am also slightly exposed to buyout over 30 (which is a possibilty before March).

JMO.