BridgeBio Pharma Plummets 9%: Earnings Optimism Clashes with Operational Woes and Market Volatility

Summary
• BridgeBio Pharma (BBIO) tumbles 9.06% intraday to $44.75, erasing $4.5B in market cap
• Q2 revenue surges to $110.6M, driven by $71.5M in Attruby sales and $37.5M in licensing
• Options chain sees heavy activity in August 15th $45 puts and calls, signaling high volatility expectations

BridgeBio Pharma’s stock implodes on Tuesday, August 6, 2025, as investors grapple with a mixed earnings report. Despite blockbuster Attruby sales and a $756.9M cash hoard, the stock plummets to a 52-week low of $42.09 amid ballooning SG&A expenses and sector-wide headwinds. The $44.75 close marks a 9.06% drop from the $49.21 previous close, with the stock trading below its 30-day moving average of $45.72.

Earnings Optimism Overshadowed by Cost Overruns and Competitive Pressures
BridgeBio’s Q2 earnings report revealed a $110.6M revenue surge, with Attruby sales doubling to $71.5M. However, operating costs ballooned to $244.8M, a 37.7% year-over-year increase, driven by a $69.6M spike in SG&A expenses. The company’s cash burn rate—$279.9M in H1 2025—contrasts sharply with its $756.9M cash reserves. Meanwhile, competitive pressures from Pfizer and Alnylam in the ATTR-CM market, coupled with high gross-to-net discounts (35%) and free drug programs (70-80%), eroded margins. Analysts at TD Cowen, while maintaining a $60 price target, warned that insurance companies’ cost-containment strategies in the $10-20B ATTR-CM market could pressure Attruby’s pricing power.

Biotech Sector Volatility Intensifies as AMGN Slides 5.89%
The broader biotech sector mirrored BBIO’s decline, with Amgen (AMGN) falling 5.89% on concerns over Trump-era pricing policies and Merck’s 6,000-job cuts. Novo Nordisk’s pipeline clearout and BioNTech’s 90-job cuts further stoked sector-wide anxiety. BridgeBio’s -9.06% drop outpaced AMGN’s decline, reflecting its higher operational leverage and exposure to niche markets. The sector’s -5.89% average move underscored investor caution ahead of Trump’s 250% pharma tariff threats and regulatory uncertainty.

Options Playbook: Capitalizing on BBIO’s Volatility with Gamma-Driven Puts and Calls
• MACD: 1.35 (bullish divergence) vs. Signal Line: 1.37 (bearish crossover)
• RSI: 64.31 (neutral) vs. 200D MA: $34.03 (far below current price)
• Bollinger Bands: 44.91 (lower band) vs. 48.42 (upper band) – stock near support

BridgeBio’s technicals suggest a short-term bounce near $44.91 (lower Bollinger Band) but a bearish near-term outlook. The 200D MA at $34.03 remains a critical long-term floor. Two options stand out for volatility-driven plays:

1. BBIO20250815P45 (Put Option)
• Strike: $45, Expiry: Aug 15
• IV: 69.57% (high volatility)
• Delta: -0.49 (moderate sensitivity)
• Theta: -0.001 (minimal time decay)
• Gamma: 0.077 (strong price sensitivity)
• Turnover: 1.33M (high liquidity)
• Leverage: 20.82% (high reward potential)
• Payoff (5% downside): $0.38/share (max profit if BBIO drops to $42.52)
This put offers asymmetric upside if BBIO breaks below $45, with high gamma ensuring rapid premium gains as the stock declines.

2. BBIO20250815C45 (Call Option)
• Strike: $45, Expiry: Aug 15
• IV: 43.46% (moderate volatility)
• Delta: 0.49 (moderate sensitivity)
• Theta: -0.152 (rapid time decay)
• Gamma: 0.124 (strong price sensitivity)
• Turnover: 26K (adequate liquidity)
• Leverage: 37.31% (high reward potential)
• Payoff (5% upside): $0.38/share (max profit if BBIO rallies to $47.00)
This call is ideal for a short-term rebound trade, capitalizing on BBIO’s 30D MA at $45.72 and RSI neutrality. Aggressive bulls may consider BBIO20250815C45 into a bounce above $45.72.

Backtest BridgeBio Pharma Stock Performance
The backtest of BBIO's performance after a -9% intraday plunge shows favorable short-to-medium-term gains. The 3-Day win rate is 48.75%, the 10-Day win rate is 55.09%, and the 30-Day win rate is 55.26%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 10.03%, which occurred on day 59, suggesting that there is potential for recovery and even surpassing the previous price level.

Act Now: BBIO’s $45 Support and AMGN’s -5.89% Signal Sector-Wide Caution
BridgeBio’s 9.06% drop reflects a mix of operational overruns and sector-wide headwinds. While Attruby’s $71.5M Q2 sales and $756.9M cash reserves offer long-term optimism, near-term risks include SG&A overruns, competitive pressures, and Trump-era pricing threats. Investors should monitor the $44.91 support level (lower Bollinger Band) and AMGN’s -5.89% move as sector barometers. For those with a contrarian edge, the BBIO20250815P45 put offers a high-gamma play on a breakdown below $45, while the C45 call targets a rebound above the 30D MA. Watch for $45.72 retests or regulatory clarity on pharma tariffs.