Biocon: Can this laggard turn into a leader after this path-breaking announcement?

So, market participants are puzzled by this out of the box up-move witnessed by the stock. What is the reason, let's find out. 

The stock of Biocon is seen buzzing on the bourses on Monday as it has jumped over 3 per cent along with a huge spike in the volumes. Interestingly, the volumes for the day have already surpassed its prior trading session volume and in fact, it is the highest since October 29, 2021. 

So, market participants are puzzled by this out of the box up-move witnessed by the stock. What is the reason, let's find out. 

Biocon Biologics Limited (BBL), a subsidiary of Biocon Ltd, today announced that it has tied up with the Research Society for the Study of Diabetes in India (RSSDI), Asia’s largest organization of researchers and healthcare professionals for diabetes, to launch a Comprehensive Care Program, BRIDGE-1, the Biocon & RSSDI Initiative for Diabetes Knowledge in Type 1 patients. 

India has among the largest population of children and adolescents living with Type 1 diabetes in the world with an estimated one million (children and adolescents) dealing with this condition as of 2019, with the number increasing every year. To address the issue of Type 1 diabetes in children in a holistic manner, Biocon Biologics will work together with RSSDI to identify and train 400 physicians in different districts across the country. Biocon Biologics will enable these HCPs with a free supply of its insulins portfolio to help over 1,000 children with Type 1 diabetes, from the marginalized communities, who otherwise cannot afford this therapy. 

The stock is up by 1.77 per cent on an MTD basis. But what’s disheartening to see is that the stock has underperformed the frontline indices and even the Nifty Pharma index on a YTD basis as the stock has corrected more than 20 per cent on a YTD basis. 

So for investors who are holding this stock, the good news is that the stock has moved above the strike price (350) of its highest base open interest on the call option, while on other hand, the highest open interest on the put side base is now shifted at 350 strike price. Sustaining above this level could trigger a good short-covering rally and it can scale towards Rs 400.