Travere Therapeutics Plunges 31.7% Amid Biotech Sector Turbulence: What’s Fueling the Selloff?

Summary
• TVTX’s intraday price slumps to $22.82, a 31.7% drop from its previous close of $34.10
• Turnover surges to 8.01 million shares, reflecting heightened volatility
• Sector-wide M&A activity and patent expiration risks dominate pharma news

Travere Therapeutics (TVTX) has experienced a dramatic intraday selloff, trading at $23.29 with a 31.7% decline. The stock’s sharp move coincides with a surge in biotech M&A activity and looming patent expirations, as highlighted in sector news. With turnover at 8.01 million shares and a dynamic PE ratio of -55.27, investors are scrambling to decipher the catalysts behind this volatility.

Regulatory Hurdles and M&A Uncertainty Spur Sharp Decline in TVTX
The selloff in TVTX is driven by sector-wide concerns over patent expirations and a thawing biotech investment environment. Recent sector news highlights a flurry of M&A activity, including AbbVie’s $5.6B pact with RemeGen and BMS’s pediatric expansion efforts, which signal a competitive landscape where smaller players like Travere face heightened pressure. Additionally, the FDA’s recent rejections of therapies (e.g., Atara’s Ebvallo) and Novartis’s Alzheimer’s play underscore regulatory risks, amplifying investor caution. These factors, combined with TVTX’s weak technicals (MACD histogram at -0.52 and RSI near 49), have triggered a flight to safety.

Pharma Sector Volatility Intensifies as M&A Frenzy and Patent Expirations Weigh on Sentiment
The Pharmaceuticals sector is under pressure as M&A deals and patent expirations dominate headlines. While sector leader Pfizer (PFE) fell 0.68% intraday, TVTX’s 31.7% drop reflects its smaller market cap and higher sensitivity to regulatory and competitive risks. The sector’s broader challenges—such as AbbVie’s $5B RemeGen acquisition and Novartis’s Alzheimer’s bet—highlight a shift toward consolidation and innovation, leaving underperformers like TVTX vulnerable to sell-offs.

High-Volatility Options Playbook: Navigating TVTX’s Turbulent Price Action with Strategic Contracts
• MACD: 0.228 (bearish divergence), Signal Line: 0.749, Histogram: -0.522 (negative momentum)
• RSI: 48.91 (neutral, but trending lower)
• Bollinger Bands: TVTX at $23.29 (well below the middle band of $36.44)
• 200D MA: $23.12 (TVTX trading near this critical support level)

TVTX’s technicals suggest a short-term bearish bias, with the 200-day moving average ($23.12) acting as a key support. The stock’s K-line pattern (short-term bearish, long-term bullish) indicates a potential rebound if it holds above $22.82. However, the high implied volatility (IV) in options—peaking at 129.91% for the TVTX20260220P17.5 put—reflects market uncertainty. Two options stand out for strategic positioning:

• TVTX20260220P25 (Put):
- Strike: $25, Expiration: 2026-02-20
- IV: 116.42% (elevated, signaling high volatility)
- Delta: -0.525 (moderate sensitivity to price moves)
- Theta: -0.0543 (rapid time decay, suitable for short-term plays)
- Gamma: 0.0454 (high sensitivity to price changes)
- Turnover: 154,662 (liquid, easy to trade)
- Leverage Ratio: 8.25% (moderate)
- Payoff (5% downside): $23.29 → $22.13 → max(0, 25 - 22.13) = $2.87 gain per contract
This put option offers a high-gamma, high-IV play for a potential rebound in volatility if TVTX breaks below $22.82.

• TVTX20260220C25 (Call):
- Strike: $25, Expiration: 2026-02-20
- IV: 116.42% (same as the put, indicating balanced risk)
- Delta: 0.498 (moderate directional exposure)
- Theta: -0.0543 (aggressive time decay)
- Gamma: 0.0454 (high sensitivity)
- Turnover: 154,662 (liquid)
- Leverage Ratio: 8.25% (moderate)
- Payoff (5% downside): $23.29 → $22.13 → max(0, 22.13 - 25) = $0 (no gain)
This call option is a high-risk, high-reward bet for a short-term rebound above $25, though the 5% downside scenario nullifies its value.

Trading Insight: Aggressive short-sellers may target TVTX20260220P25 for a 5% downside scenario, while bulls should wait for a bounce above $25 before considering TVTX20260220C25.

Backtest Travere Therapeutics Stock Performance
The 3-Day win rate for TSVX after a -32% intraday plunge is 48.83%, the 10-Day win rate is 52.02%, and the 30-Day win rate is 52.44%. The maximum return during the backtest was 6.35% over 30 days, indicating that while short-term performance was mixed, TSVX showed resilience and the potential for recovery over longer time frames.

Act Now: TVTX at Pivotal Crossroads—Short-Term Volatility or Long-Term Opportunity?
TVTX’s 31.7% intraday drop reflects a confluence of sector-wide M&A pressures, regulatory risks, and weak technicals. While the stock’s 200-day MA ($23.12) and Bollinger Bands (lower at $32.37) suggest a potential rebound, the high IV in options and sector leader Pfizer’s 0.68% decline indicate ongoing uncertainty. Investors should monitor TVTX’s ability to hold above $22.82 and watch for catalysts like FDA decisions or M&A rumors. For now, the TVTX20260220P25 put offers a strategic short-term play, but patience is key as the stock’s long-term bullish K-line pattern remains intact.