Questions are being asked about the trading in shares of a US pharmaceutical company ahead of good news about a possible coronavirus treatment.
US based Gilead Sciences has been developing former Ebola drug remdesivir for patients with COVID-19, a disease that has killed more than 370,000 people worldwide.
It announced promising results in early stages of its trials on 17 April, sending its share price up by nearly 10%.
But the previous day, when shares hovered around $75, four large blocks of options were purchased for about $1.5m each, according to a report by Reuters.
In one of the trades, 3,143 calls betting Gilead’s shares would rise above $85 by 21 August were purchased for $1.6m.
During 17 April, the value of those contracts jumped to $3.02m. The other three trades also did well.
A few weeks later, the US Food and Drug Administration gave remdesivir authorisation for emergency use to treat COVID-19 patients.
Henry Schwartz, president of options analytics firm Trade Alert, described the trades as “pretty big”, adding that the timing “stands out”.
“It does look like somebody had some sort of reason to pick that time of day to put a lot of capital to work on Gilead,” said Mr Schwartz.
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