Confirmed screwworm case in Texas sends two biotech stocks higher
A flesh-eating parasite known as the New World screwworm Found in livestock in Texasand traders are talking about potential winners in the stock market.
shares zoetia And Elanco Animal Health It moved higher in Thursday’s trading, and the usually dormant options markets in stocks woke up to a heavy bullish sentiment.
Zoetis was last up nearly 4% and Elanco was up 2% in midday trading.
Zoetis shares in the last five trading days
Zoetis in particular has seen an increase in volumes. The company received conditional approval from the U.S. Food and Drug Administration last year. an injectable product This treats the pest and prevents it from re-infesting. Last month, the FDA expanded its support to: emergency use authorization for over-the-counter medicine.
Options volume on Zoetis was nearly 20 times the daily average, with just under 12,000 contracts traded and almost 11,000 calls. More than 4,200 calls were purchased versus 1,200 calls sold and fewer than 300 calls traded.
Initial trading flows were targeting the $85 level in the stock; That includes one trader who bought nearly $700,000 of the 80 calls expiring July 17 for about $5 per contract — a bet that the stock would rise another 5% by mid-July.
“Screwworm is currently circulating in tens of thousands of animals in Mexico,” said Scott Gottlieb, a senior fellow at the American Enterprise Institute and former commissioner of the FDA. “If cases start clustering or we see detection in wildlife like white-tailed deer, the odds of keeping this at bay drop sharply. The biggest vulnerability is the next 18-24 months.”
Cattle futures So far they are taking the news positively; They were up more than 1% in the session but are up 50% from late-2024 lows, amid a multi-year rally. The beef supply could be strained if the parasite spreads, but the bigger question may be whether the news alone will scare Americans away from the drive-thru.
“The No. 1 commodity of choice in the U.S. is beef; Americans love fast food, so if you have any issues with the beef supply chain, there’s going to be some volatility in the market,” said Ben Rand, Nebraska-based broker and Federal Crop Agency regional manager for Blue Line Futures. “We just approved a drug for conditional use; U.S. manufacturers can handle it.”
