Sanofi-Aventis (SNY - option chain) stock is trading lower today after the company said last night that its experimental breast cancer treatment iniparib failed to meet its goal in a Phase 3 study. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on SNY.

This morning, SNY opened at $33.83. So far today the stock has hit a high of $34.01 and a low of $33.29. As of 12:30, SNY is trading at $33.41, down $1.84 (-5.2%). The chart for SNY looks bullish and S&P gives SNY a positive 4 STARS (out of 5) buy ranking.

Bristol-Myers Squibb (NYSE: BMY - option chain) shares are falling today after the European Medicines Agency said it has rejected a request by BMY to market its breast cancer drug Ixempra. The agency said the increase in survival rates using the drug was not significant enough to warrant approval. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BMY.

This morning, BMY opened at $18.92. So far today the stock has hit a low of $18.12 and a high of $19.30. As of 12:15, BMY is trading at $18.60, down $0.68 (3.5%). The chart for BMY looks bullish and S&P gives BMY a positive 4 STARS (out of 5) buy ranking.

For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $22.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in four weeks as long as BMY is below $22.50 at December expiration. Bristol-Myers would have to rise by more than 21% before we would start to lose money. Learn more about this type of trade here.

TGT hasn't been above $45 since early September and shown resistance around $21.50 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY.

Genentech Inc. (NYSE: DNA) shares are trading higher this morning on news that the Food and Drug Administration granted conditional approval for its oncology drug Avastin for the treatment of breast cancer Friday after market close. The drug is already approved for the treatment of colorectal and lung cancers. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on DNA.

After hitting a one-year high of $86.04 last February, the stock hit a one-year low of $65.35 in December. DNA opened this morning at $78.12. So far today the stock has hit a low of $77.57 and a high of $79.40. As of 10:45, DNA is trading at $78.06, up $6.46 (9.0%). The chart for DNA looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a June bull-put credit spread below the $65 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make an 8.7% return in just four months as long as DNA is above $65 at June expiration. Genentech would have to fall by more than 16% before we would start to lose money.

DNA hasn't been below $65 at all in the past year and has shown support around $70 recently. This trade could be risky if there is new bad news about one of the company's drugs, but even if that happens, this position could be protected by the support the stock might find around $67, where DNA bottomed this past winter.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in DNA.

That the FDA has granted accelerated approval to Genentech (NYSE: DNA) for Avastin for the treatment of patients with breast cancer is not just big news for the company, but great news for women around the world in their fight against the dreaded cancer.

"There is no cure for metastatic breast cancer, so it is important to control the disease as early and for as long as possible," said Kathy Miller, M.D., Associate Professor of Medical Oncology, Indiana University School of Medicine and lead investigator on the E2100 trial. "Now with Avastin plus Paclitaxel, we can increase the time a woman's cancer is kept under control, and offer a biologic option to women who previously were limited to chemotherapies alone."

"As an oncologist who has treated women with metastatic breast cancer, I know how important the first course of therapy can be," said Susan Desmond-Hellmann, M.D., M.P.H., president, Product Development, Genentech. "New treatments are needed, and this approval provides women who have not yet received chemotherapy for their metastatic breast cancer a new option to consider with their physician and families."

Huge biotech firm Genentech, Inc. (NASDAQ: DNA) had high hopes that its drug Avastin would be effective in treating breast cancer patients. The product is currently used for colon and lung cancer and brought the company about $1.7 billion last year. One source said that the drug has brought in almost $2.65 billion so far this year.

The FDA turned Genentech down. According to The Wall Street Journal, an agency panel "on a 5 to 4 vote, said the data provided by the company wasn't sufficient to provide a favorable risk benefit analysis for Avastin." Many on Wall Street had expected the drug to get the green light. Jim Reddoch of Friedman Billings Ramsey looked particularly foolish when he predicted this morning that "a Food and Drug Administration panel will recommend Genentech Inc.'s drug Avastin be approved as a breast cancer treatment." Hopefully, the firms clients did not follow his lead.

When the news hit, Genetech's shares dropped 9% to $66.29, a new 52-week low.

The lesson in all of this is that listening to guesses from research firms can be a dangerous game. Better to wait and see what the feds say.

Douglas A. McIntyre is an editor at 247wallst.com.

Genentech (NYSE: DNA) is halted down $6.65 to $66.13. The FDA's Oncologic Drugs Advisory Committee rejected Avastin for the use in breast cancer. As of Dec. 31, 2006, Roche Holdings owned a 55.8% position in DNA. DNA call option volume of 83,833 contracts compares to put volume of 46,382 contracts. DNA December option implied volatility of 50 is above a level of 33 from an hour ago and its 26-week average of 25 according to Track Data, suggesting larger price risk.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Peregrine Pharmaceuticals Incorporated (NASDAQ: PPHM) is in such poor financial shape that it has been delisted has received a notice of its failure to meet continuing NASDAQ Capital Market requirements and may soon be delisted. The stock is currently priced at $0.70 and does not publicly trade.

Why should investors care whether a small biopharmaceutical company implodes like so many long-ago dot coms? Because Peregrine is running several important clinical trials testing whether its product, bavituximab, might be another weapon in the fight against prostate and breast cancers, diseases which kill tens of thousands of Americans every year. In the fight against cancer, every likely beneficial treatment scenario needs to be pursued aggressively.

Peregrine recently raised $21 million from institutional investors in order to fund the continued collection of data in its clinical trials. This is good news, except that the clinical trials are being run not in the US, but in India where there are fewer patient protection policies and data collection and analysis is much cheaper to produce. Presumably, credible evidence from the India clinical trials will convince the FDA to allow clinical trials using bavituximab in the US.

A recent piece of good news for Peregrine is that the Department of Defense is investigating whether bavituximab may be effective in treating hemorrhagic fever. It is possible that Peregrine will be awarded a five-year contract worth almost $45 million to develop treatment protocols and run clinical trials investigating this use of its product. Such a contract would help Peregrine immensely. In its most recent quarterly report, Peregrine recorded a net loss of $4.65 million, less than last year's $5.45 million loss, but hardly good news. Peregrine did post $1.6 million in earnings from its wholly owned contract drug manufacturing subsidiary Avid Biosciences. If bavituximab does prove effective in the fight against some types of cancer, and if the drug does win FDA approval for use in the U.S., then Peregrine will have in-house manufacturing facilities. The need for such expertise currently seems a long ways away for Peregrine, which may be an attractive buy-out candidate by a much larger pharmaceutical company.

Pfizer (NYSE: PFE) is looking for additional uses for its popular drug Viagra in order to keep up sales when its patent expires in a few years. One possible use for Viagra is being studied at Henry Ford Hospital in Detroit. The study is to determine whether patients who have suffered moderate strokes will recover more rapidly if given Viagra within 7 days of stroke symptoms. Can the brain on Viagra form new blood vessels and nerve connections better than without Viagra?

In another clinical trial, Viagra, repackaged in white (not blue) 20 milligram pills and renamed Revatio, is used to treat pulmonary hypertension, a lung disorder affecting both adults and children. So we should give our kids a form of Viagra with their Flintstones vitamins? Pfizer has come under some criticism for the cost of Revatio compared to that of Viagra. Taken 3 times per day as Revatio, the drug costs $33.50 per day or over $11 per 20 milligram pill. Taken as Viagra in 100 milligram doses, the drug costs just over $11 per pill. Pfizer argues that the 20 milligram pill costs as much as the 100 milligram pill because of the increased costs to gain federal approval for use in an entirely new group of patients.

Viagra is also being studied for possible use in treating high blood pressure in pregnant women and to ease menopause symptoms. This last use has been challenged recently, particularly by a group of women in Utah. According to an article by Brooke Adams in The Salt Lake Tribune, at least 75 women have joined together to form a class action suit against Pfizer. The women claim that taking Pfizer's Provera, synthetic progesterone, to control menopause symptoms caused them to develop breast cancer.