Novo Nordisk A/S (NYSE:NVO) is down 1% to trade at $59 this morning, after news surfaced that the pharmaceutical concern has entered an agreement to purchase U.S.-based peer Akero Therapeutics Inc (NASDAQ:AKRO) for as much as $5.2 billion in cash. AKRO is charging 16.8% higher in response, last seen at $54.29. The agreement has been unanimously approved by the Board of Directors at Akero.
Novo Nordisk stock is down 31% year-to-date, succumbing to recent overhead pressure at $60. The shares have been struggling to recover from a late-July, post-earnings bear gap, which saw the equity plunge nearly 22% in one session.
On the flip side, AKRO has enjoyed a long-term outperformance, with the shares boasting a 95% year-to-date lead and now eyeing their best day since May. While the equity remains notably below its late-January record high near $58, Akero stock is about 370% off its 2023 lows.
The options pits have been much more bullish than usual for NVO over the last 10 weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day put/call volume ratio of 3.96 stands in the 90th percentile of annual readings. An unwinding in this bullish sentiment could trigger more headwinds for Novo Nordisk stock.
Now looks like a great time to weigh in with options. This is per both NVO and AKRO's Schaeffer's Volatility Index (SVI) of 54% and 61%, which sit in the 29th and 10th percentile of annual readings, indicating options traders are pricing in relatively low volatility expectations for both pharma stocks.
