A large call spread initiated on Orexigen Therapeutics, Inc. (Ticker: OREX) on Monday morning looks for shares in the name to rally approximately 30% by September expiration. The September expiration is noteworthy as the company awaits the results of the FDA’s review of its resubmitted New Drug Application (NDA) for NB32, an investigational medication being evaluated for weight loss, after the review was extended for three months back in June. The upcoming Prescription Drug User Fee Act (PDUFA) date is September 11, 2014, according to a press release issued by the company. Shares in Orexigen today are up roughly 0.40% at $5.34 as of 2:15 p.m. ET.
The largest trade in OREX options today appears to be the purchase of a 10,000-lot Sep 5.0/7.0 call spread at a net premium of $0.72 per contract. The spread positions the investor to make money above an effective breakeven price of $5.72, with maximum potential profits of $1.28 per contract available on the spread in the event that OREX shares rally 31.0% over the current price to hit $7.00 at expiration. Shares in Orexigen last traded above $7.00 on June 10th.
