Human Genome Sciences, Inc (HGSI)

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Put sellers active in Human Genome

Human Genome Sciences is probing long-term support, and put sellers are active before earnings.

optionMONSTER's tracking systems detected heavy activity in the August 22 contracts, which changed hands more than 5,000 times. Premiums declined from $0.68 to $0.65 as the trades crossed, with most of the volume pricing at the lows.

The put selling reflects a belief that HGSI will hold its ground or rally after reporting earnings this afternoon. (See our Education section)

The biopharmaceutical company saw a massive rally between July 2009 and April 2010 amid enthusiasm about the lupus drug Benlysta, climbing more than 1,100 percent from below $3 to over $33. Since then it's been drifting, and now is back to the lower end of its range over the last 1-1/2 years.

HGSI is down 0.56 percent to $22.96 in midday trading. It has lost 19 percent of its value in the last three months.

Revenue is expected to be $168.68 million this year, and then almost triple to $477 million in 2012. Given its huge growth prospects, some investors might consider a single quarter's worth of earnings unimportant and think that HGSI is now attractive from a long-term perspective.

The last report on April 28 missed forecasts on the bottom line as it spent money preparing to market Benlysta. Revenue, however, significantly exceeded forecasts.