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Hawk’s Nest

Unusual Call Buy in Blueprint Medicine (BPMC) Ahead of Key Breakout, Commercial Ramp

by | Sep 3, 2021

Blueprint Medicines (BPMC) small-cap biotech with one of the more unusual trades of the day on 9/2 with a block of 2,500 October $120 OTM calls bought for $2.65 on a wide bid-ask spread. BPMC also had 350 October $100 calls bought for $6.50 yesterday. BPMC doesn’t have any other notable open interest. Shares broke out of a bull flag yesterday and above a big volume node with room to run to $105+. The $5.7B company trades 16.25X earnings, 6.9X sales, and 14X FCF. BPMC is a global precision therapy company with a focus on oncology and hematology and some potential opportunities in rare diseases. They have four approved drugs by the FDA including recently Avyakit for PDFGRA GIST and Advanced SM. The launch has seen strong initial adoption. Their pipeline is pretty much all pre-clinical at this point with drugs in advanced HCC, NSCLC, and other cancers all in the early stage development. Analysts have an average target for shares of $116 with a Street High $152. Piper positive on 7/29 citing management bullish commentary around Ayvakit’s AdvSM uptake while all programs remain essentially on track and looks for key readouts to commence next year. Leerink with a $137 PT in June noting that while the approval and label were relatively in line with broader expectations, the clean label lifts an overhang that the drug would be delayed or have onerous warnings regarding the intracerebral hemorrhages noted in the program. JMP has a $152 PT for shares and noting that the recent approval is their fourth in 18 months. Short interest is 6.3%. Hedge fund ownership fell 1% last quarter. Farallon Capital, Point72, and Balyasny notable buyers while Casdin Capital and Cadian Capital both notable holders.