Abivax (ABVX) Surges 5.03% on M&A Speculation: Is This the Biotech Breakout We’ve Been Waiting For?

Summary
• Abivax (ABVX) rockets 5.03% to $145.31, hitting its 52-week high of $148.83
• Rumors of a potential buyout by Eli Lilly dominate headlines, with French media reporting regulatory discussions
• Turnover surges to 948,822 shares, reflecting heightened retail and institutional interest

Abivax’s explosive intraday move on December 24 has thrust the French biotech into the spotlight. The stock’s 5.03% rally, driven by persistent M&A speculation, underscores the sector’s appetite for high-conviction plays. With Eli Lilly rumored to be in talks with French regulators, investors are weighing the likelihood of a premium acquisition and its implications for ABVX’s near-term trajectory.

M&A Speculation Ignites Biotech Bull Run
The surge in ABVX is directly tied to persistent rumors of a potential buyout by Eli Lilly, fueled by a French media report detailing discussions between Lilly representatives and French Treasury officials. This speculation resurfaced after a similar price spike on December 10, when positive Phase 3 trial results for Abivax’s ulcerative colitis drug obefazimod reignited interest. The biotech’s recent performance aligns with its history of volatility around M&A catalysts, as investors anticipate a strategic buyer’s premium. While Lilly has not officially commented, its recent acquisition of Adverum Biotechnologies highlights its aggressive M&A strategy, further stoking market enthusiasm.

Biotech Sector Awaits Catalysts as AMGN Trails ABVX’s Volatility
The broader biotech sector remains in a mixed state, with Amgen (AMGN), the sector’s leader, posting a modest 0.745% intraday gain. While AMGN’s steady performance reflects its defensive appeal, ABVX’s sharp rally highlights the sector’s appetite for speculative momentum plays. The biotech index’s lack of a clear directional bias contrasts with ABVX’s M&A-driven surge, underscoring the stock’s unique positioning as a high-risk, high-reward proposition. However, the sector’s reliance on regulatory and clinical catalysts means ABVX’s move may not be sustained without concrete developments.

Options and ETFs for the ABVX Bull Case
• MACD: 4.67 (above signal line 3.84), indicating bullish momentum
• RSI: 68.71 (neutral to overbought), suggesting potential for further gains
• Bollinger Bands: Price at $145.31, well above the upper band of $139.01, signaling overextension
• 200D MA: $53.55 (far below current price), highlighting extreme divergence

ABVX’s technicals paint a picture of aggressive bullish momentum, with the stock trading at a 177% premium to its 200-day average. The RSI’s proximity to overbought territory and the MACD’s positive divergence suggest the move could extend, but caution is warranted given the stock’s speculative nature. For leveraged exposure, the absence of a relevant ETF complicates direct plays, but options offer high-risk, high-reward opportunities.

Top Options Contracts:
• ABVX20260220P160 (Put): Strike $160, Expiry 2026-02-20, IV 45.50%, Delta -0.65, Theta -0.002, Gamma 0.0139, Turnover 0
• ABVX20260515P160 (Put): Strike $160, Expiry 2026-05-15, IV 37.55%, Delta -0.59, Theta -0.015, Gamma 0.0114, Turnover 0

ABVX20260220P160 offers a high leverage ratio (7.57%) and moderate delta (-0.65), making it sensitive to price swings. Its low turnover, however, raises liquidity concerns. ABVX20260515P160 has a lower IV (37.55%) and higher theta decay (-0.015), making it a speculative bet on prolonged volatility. Under a 5% upside scenario (targeting $152.57), the put options would expire worthless, but the stock’s current overbought condition suggests a pullback risk. Aggressive bulls may consider ABVX20260220P160 for a short-term play if $160 breaks, but liquidity constraints demand caution.

Backtest Abivax Stock Performance
The backtest of ABVX's performance following a 5% intraday increase from 2022 to the present shows favorable results. The 3-Day win rate is 56.93%, the 10-Day win rate is 57.68%, and the 30-Day win rate is 64.04%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 26.00% over 30 days, suggesting that ABVX can offer significant gains even after the initial 5% surge.

ABVX’s M&A Narrative Gains Momentum: Position for a Volatile Finish
Abivax’s 5.03% rally on M&A speculation has positioned it as a focal point in the biotech sector, with technicals and sentiment aligning for a potential breakout. However, the stock’s extreme overextension—trading 177% above its 200-day average—demands vigilance. Investors should monitor regulatory developments and Eli Lilly’s public stance, as confirmation of a deal could trigger a parabolic move. For now, the sector leader Amgen (AMGN) offers a safer haven with its 0.745% gain, but ABVX’s narrative-driven volatility presents a high-conviction trade. Watch for a breakdown below $139.01 (Bollinger upper band) or a regulatory green light to validate the M&A thesis.