The back story: Back in August, I told you that Eiger Biopharmaceuticals (EIGR) looked like a great opportunity. It was down from its 52-week high of $18 to a low of $8, but I thought that two upcoming catalysts could spark a nice runup for the stock. I took a 1,000-share position Aug. 17 at $7.96 and sold at $9.33 on Sept. 5, but it gained a bunch more since, closing Wednesday at $13.65.
The set-up: EIGR plans to release interim data on a Phase 2 study for Pegylated Interferon Lambda in hepatitis delta virus at the American Association for the Study of Liver Disease meeting Oct. 20-24. That’s in just a few trading days. At the J.P. Morgan Healthcare Conference Jan. 8-11, EIGR will release Phase 2 data on Ubenimex, a pulmonary arterial hypertension drug. Poor data on either of those events could lead to another good trading opportunity. A big move down would create a big gap up with little to no resistance for the next catalyst run.
How I’m playing it: I’m not. It’s run way past my target, which was about $10 a share. It’s up about 70 percent, so now would be a solid time to book those profits if you still have a position, when it’s up quite a bit and the market’s really hot.
Selfishly, however, I’m hoping for negative data in the next week or so, because I’d like to play the second catalyst run, with a nice chart setup when it’s undervalued.
Kyle Dennis runs Kyle Dennis’ Biotech Breakouts (biotechbreakouts.com). He is an event-based trader, who prefers low-priced and small-cap biotech stocks. He has no shares, options or open orders in EIGR, having last owned the stock in early September, when he traded it as described in this commentary.