The back story: Eiger BioPharmaceuticals Inc. (EIGR) has caught my eye again. In August, I saw a nice opportunity for a runup: it was down to $8 from its high of $18, with two data reports coming up. Now, we have the first data release and some new information in the form of a stock offering.

Kyle Dennis’ August call on EIGR

How I played it: I took a 1,000-share position Aug. 17 at $7.96 and sold at $9.33 on Sept. 5. I revisited EIGR Oct. 12 to suggest investors take profits, as the stock had run way past my $10 target. Sure enough, it peaked at $13.85 the next day.

The first catalyst:  On Oct. 23, EIGR announced positive interim results for its Phase 2 study of pegylated interferon lambda (Lambda) in hepatitis delta virus. The market wasn’t super impressed – EIGR pulled back below $11 on 10/24 and closed at $11.60 on Friday, the same day it priced the stock offering at $10 per share.

The second catalyst: Now that the first play is out of the way and the offering is priced, we can think about how to play EIGR in advance of a Phase 2 data release on Ubenimex in pulmonary arterial hypertension. That will be released at the J.P. Morgan Healthcare Conference Jan. 8-11, an important conference that typically has a lot of market-moving news.

The upshot: I’m watching EIGR for a pullback, and I think that when it hits the $10 offering price, I will want to be a buyer.

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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 stocks, options or open orders in EIGR, having traded it earlier this year, as described above.

 

Author: Kyle Dennis

Straight outta college Kyle Dennis taught himself to trade, and then made over $7 million in trading profits by the time he was 28 years old. Kyle reveals how to find, track, and profit from lucrative trades for exceptional profits. Thousands of traders follow him every day to learn how to target these high probability trades.

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