The Nasdaq is leading the charge today, with biotech exchange-traded fund (ETF) SPDR S&P Biotech ETF (XBI) up over 2% today. Digging deeper, Alpine Immune Sciences Inc (NASDAQ:ALPN) is soaring to eight-year highs today, up 36.9% to trade at $64.39, after news that Vertex Pharmaceuticals (VRTX) will acquire the biotech company for $4.9 billion. The buyout represents a 67% premium to ALP's share price before rumors of it.
The news is lifting Vera Therapeutics Inc (NASDAQ:VERA) as well, as Vera's lead candidate is similar to Alpine's. Though the treatments are being evaluated for different purposes: Alpine's for a kidney condition and Vera's for autoimmune diseases, both block specific proteins. At last check, VERA was up 5.2% to trade at $43.80, earlier as high as $45.11.
Some of today's gains could be attributed to short covering. Short interest represents 8.8% of ALPN's available float, and 13.3% of VERA's, representing plenty of pent-up buying power at both.
Options traders are blasting ALPN in response to the news. So far, 11,000 calls and 14,000 puts have been exchanged, which is already 38 times the stock's average daily options volume. The August 60 put is the most popular, with new positions being sold to open there. It's also worth noting that VERA could find support at the $40 level, which is home to large put open interest (OI) at the April expiry.
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