Bullish Bets Placed in BioTime Inc. (NYSEMKT: BTX)

Traders exchanged 1,506,412 shares of BioTime Inc. (NYSEMKT: BTX), a clinical-stage biotech company focused on the development and commercialization of products addressing degenerative diseases. Today’s trading volume was over 3 times the average 30-day trading volume. Shares were also up significantly, on March 17, 2017, the stock was up 15.81% on the day. BioTime, Inc. had a wide 52-week range, trading between $2.26 and $4.01, as of March 17, 2017.

That said, the stock has been up over the past trading week, outperforming the industry by 14.24%. It’s not a surprise BioTime, Inc. was up 21.00%; the entire biotechnology industry has been has also been up 2.28% over the last month.

BTX Financial Results

BioTime Inc reported its fourth quarter and full year 2016 fiscal financial results this week. The Co-Chief Executive Officer was ecstatic with the company’s performance and stated“I’m happy with the tremendous progress we made last year in all three of our strategic objectives, clinical development, simplification and unlocking value of non-core programs…We still have more to do, and are well on our way to transforming the company in 2017.”

The company had positive data from Renevia, and the company could launch a commercial product in approximately one year, if it proves to have more positive data. BioTime is expected to issue top-line clinical trial results in mid-2017, and if the data is positive, BioTime plans to submit an application for CE Mark approval in Europe at the end of 2017.

BTX Option Activity

A bevy of bullish option activity occurred today in BioTime Inc., as we saw more than 11.2 times usual options volume.  On average day, you’ll see less than 100 options trade in BioTime, so when over 1k options traded today, it was considered a big deal.

Now, what makes these trades interesting is that they were spread out. Traders were not buying one expiration period and the same strike, they were spread out. For example, we saw call buying on the March 3 calls for $0.20. In addition, new opening positions were made on the April $4 strike for $0.15, right before the close when the stock was trading at $3.60.

In other words, this trader would need to see BioTime trade at $4.15 on the expiration date in order to break-even. That means they would need to see the stock gain at least 15.3% from where they bought in.

One thing to keep in mind, these were not huge capital outlay trades. Even if someone bought 500 options for $0.15, that’s only $7500 in premium. With that said, these orders could have been anyone, not necessarily coming from an institution. We’ll have to monitor this situation to see if the option activity picks up, and if the open interest increases on Monday.

BTX options

Source: Yahoo Finance!

BTX Key Statistics

You may find the metrics below on BioTime, Inc. useful:

– BioTime, Inc. had a market cap of about $359M, as of March 10, 2017.
– BTX had 109,963,474 shares outstanding and a short interest of 7,977,330 shares, or 7.25% shares short.
– BioTime, Inc. had a trailing 12-month EPS of $0.21, and it had revenue of 5,923,000.
– BTX reported total liabilities of $12,064,000 and total equity of $117,928,000 in its recent financial statements.
– The company had a D/E ratio of 10.23%, indicating BioTime, Inc. has not been taking on too much debt.

Bull Case

The company announced some milestones in its most recent fiscal results, and it indicated one of its products could potentially be produced commercially, which would increase earnings and revenues for the company. The company was able to decrease its net loss per basic and diluted common share to 5 cents for the fourth quarter of 2016, compared to a 15 cent loss per share during the 2015 fiscal year. Additionally, the company has not been taking on a high degree of debt. Moreover, we saw bullish options activity in BTX, indicating the markets may be looking for this stock to run higher.

Bear Case

On the other hand, the company’s revenues decrease year over year. However, this was primarily due to the deconsolidation in May 2016. Now, the company’s cash and cash equivalents decreased to $22.1M for the 2016 fiscal year, compared to $42.2M for the 2015 fiscal year.

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