Imagine watching a stock soar nearly 180% in a single trading session. Would you be tempted to jump aboard?

Veteran trader Jonathan Rose, editor of Advanced Notice, would probably tell you to resist that temptation – at least until you’ve done a little more homework.

In today’s Friday Digest takeover, Jonathan uses a remarkable recent biotech rally to illustrate one of the most important distinctions in trading: A company can have terrific news, a promising future, and plenty of institutional buying interest… yet still be a lousy trade at the current price.

That’s especially relevant in biotech, where clinical trial results and FDA decisions can send stocks soaring – or plunging – almost overnight.

So, today, Jonathan explains how he uses the FDA’s calendar, unusual options activity, and a handful of trading rules to separate opportunities worth pursuing from stocks he’d rather leave alone. Along the way, he highlights three biotech companies he’s watching closely and explains why he’s passing on another highflyer.

It’s the same disciplined approach Jonathan detailed this past Wednesday night in his free $10K to $100K Challenge event, where he walked through the signals, tools, and risk-management principles behind his trading strategy. You can watch the replay right here.

Bottom line: finding the right stock is only half the battle. Knowing when – and whether – to trade it can be just as important.

I’ll let Jonathan take it from here.

Have a good evening,

Jeff Remsburg

You’re running late to a movie you’ve been waiting months to watch. But when you go from a bright lobby and into the theatre, you can’t see a thing.

You squint when you enter, and walk slowly up the stairs as you look for an empty seat. When you finally spot one, you find yourself apologizing as you step on the feet of the other movie-goers who came on time.

By the time you sit down, your shoes are sticky because you couldn’t see the pool of soda on the floor that hadn’t been cleaned up after the previous showing.

When we step out of a bright place and into a dark room, it takes 15 minutes for our eyes to adjust to the dark.

That same period of adjustment from light to dark is how long it took the options market to catch up to what FDA trial data already showed.

On September 28, Kodiak Sciences Inc. (KOD) put out positive Phase 3 data on its DAYBREAK trial. The trial was designed to address a condition known as wet age-related macular degeneration — an eye condition that causes blurred vision or reduced central vision.

KOD’s two experimental eye drugs — Zenkuda and tarabirafusp-ted — proved capable against the current standard of care, aflibercept, at just one year. Even better, 54% of patients actually hit durability at just six months. That’s the number that actually tells you whether a drug holds up once the trial ends.

The stock didn’t just drift higher on the news. It exploded. Shares of Kodiak gapped up as much as 177.96% that day on 38.46 million shares traded — more than 54 times its roughly 701,000-share average volume.

That’s not a retail headline-chase. That’s the kind of volume that only shows up when institutional money decides it needs to own a name right now, all at once.

Zoom out and the full move is even bigger. KOD has run from around $22 back in February to over $98 today against a $5.94 billion market cap — a gain of more than 300% in under a year.

But here’s the part most traders miss: A gap that big doesn’t automatically mean the trade is still good. Proof is not the same thing as entry.

The science behind KOD’s durability data can be exactly right while the stock, sitting 178% above where it opened that morning, is temporarily the wrong price to pay.

What I want to see now isn’t another headline — it’s fresh demand showing up after the stock consolidates, not late money chasing premium into spreads that have already blown out.

And I believe KOD — along with a whole basket of AI-driven biotech names I’ve been tracking — could gain even more momentum from here, based on one of biotech’s best gauges of all: the PDUFA calendar.

Today, I’ll explain what the PDUFA calendar is, the catalysts my system is flagging that could boost three biotech stocks higher, and the popular biotech name I’m avoiding right now.

I’ll also explain how this ties into my $10K to $100K Challenge event, which aired earlier this week. You can watch the replay here.

Investors Watch These FDA Dates Like Hawks

PDUFA stands for Prescription Drug User Fee Act. Basically, it tracks when the FDA makes decisions on new drugs.

Think of it like earnings season but for biotech. Every time a PDUFA date hits, a biotech stock either soars or tanks based on whether the FDA approves their drug.

Here’s the best part: You know these dates months in advance.

Advisory committees meet. They evaluate the drug. They vote. And the FDA almost always follows their recommendation.

It’s not a surprise. It’s scheduled and predictable.

And over the next few months, we’ve got a wave of PDUFA dates coming — everything from skin cancer treatments to digestive disease medications. And many of these companies are already pulling in massive government funding as AI makes their research faster and cheaper.

That’s exactly why I’ve been watching biotech all through 2026. These names don’t move in lockstep with the Nasdaq Composite, the AI trade, or the hyperscalers.

But they share something even more valuable to a trader like me: smaller market caps, and a lot of volatility.

The clinical and regulatory milestones we see on the calendar create catalysts the options market can price faster than the broader stock market. So whenever a PDUFA date hits, it can cause a stock to reprice in a single session. The signal isn’t just price. It’s participation.

And when price, volume, and liquidity arrive together, that hands us the sort of volatility that makes the smaller names in this space move.

That’s the exact dynamic I’m highlighting today in three stocks I’m watching — plus the one I’m passing on that could still be a great trade after another catalyst hits.

Stock No. 1: BioMarin Pharmaceutical Inc. (BMRN)

BioMarin pairs a real AI catalyst with a business that’s already proven itself. The company has built a system to screen AI-generated enzyme candidates for its rare-disease pipeline — treatments for conditions with no cure today, from rare skeletal disorders to Duchenne Muscular Dystrophy.

The pipeline is promising. The stock, lately, hasn’t been.

I actually flagged BMRN on my daily show, Masters in Trading LIVE, a few weeks ago during its most recent pullback. At the time, it was trading around $57.40, with an expected move near $57.79 — that’s the range options traders are pricing in for the stock, based on how the options themselves are priced.

Here’s why that number matters: over the last three years, BMRN has stayed inside that expected range about 80% of the time.

Over the last two years, it’s been even tighter — 87.5%. That tells me the options market has done a solid job pricing this stock’s moves. Right now, without a fresh data point to push it, BMRN is sitting toward the bottom of that range.

But don’t mistake “quiet” for “ignored.” Institutional money is still positioning here as BMRN heads toward new trial results and a PDUFA date in January 2027.

If we start seeing a clear imbalance in trading activity ahead of that date, that’s worth watching closely.

Stock No. 2: Precigen (PGEN)

Precigen just landed an FDA platform-technology designation for its AdenoVerse platform — the same technology behind its already-approved product, PAPZIMEOS.

Translate that into plain English: the FDA is letting Precigen reuse what it already proved works — its manufacturing know-how, its preclinical data — instead of rebuilding that case from scratch every time. One validated platform, multiple shots on goal.

That’s exactly what’s playing out with PRGN-2012, Precigen’s treatment for adults with recurrent respiratory papillomatosis (RRP) — a rare disease that causes benign tumors to grow in the respiratory tract.

Since clearing its PDUFA date late last year, PGEN has ripped higher — up 104.31% year-to-date.

There’s no confirmed PDUFA date left on the calendar for 2026, but don’t read that as a quiet stretch. I expect this early win to open the door to more drug applications working their way through the pipeline.

Momentum here is real. Entry discipline still matters.

Stock No. 3: Absci Corp. (ABSI)

If you want to see AI actually designing a drug — not just assisting with one — this is the name.

Absci’s ABS-201 was built by generative AI from the ground up. It’s an antibody treatment targeting endometriosis, and the company’s planning a global Phase 2 study of roughly 150 patients across 10-plus countries, with the trial set to kick off around mid-2027, pending regulatory sign-off.

No PDUFA date on the board for the rest of this year — that comes later. But 2027 is shaping up to be a busy one.

In the meantime, ABSI is already up 217.19% year-to-date, on a $1.84 billion market cap. That’s small enough to move fast on a headline, and big enough that institutions are already paying attention.

Stock to Avoid: Moderna Inc. (MRNA)

Here’s where discipline actually matters.

Moderna shares are up 566.94% over the past year — a number that would make almost any trader want in. But MRNA’s market cap sits at $75.86 billion, well outside our under-$50 billion screen.

A great story that breaks the rules is still a pass — and that discipline is exactly what keeps a 300% gap-up day like KOD’s from turning into an account-blowing mistake.

What to Look for in Unusual Options Activity

When it comes to AI biotech stocks, here’s what I’m always screening for:

• Premium meaningfully above a name’s normal trading activity
• Trading volume that exceeds open interest, with spot confirming the direction
• Expirations that line up with a known catalyst — not just zero-day noise

Unusual trading activity is only one piece of the puzzle. You still need to understand the company, the catalyst, the stock’s price action, the options’ liquidity, and the amount you’re willing to risk before any of this means anything.

We have AI rapidly overhauling the process of making life-saving drugs. And with this many potential approvals lined up on the calendar, we’ve got a series of catalysts that could send any of these names surging higher from here.

During my recent $10K to $100K Challenge event, I show you how to set up in the next wave of AI names and the system I use to find those names in the first place. I also reveal a simple strategy that could help you turn every $10,000 into $100,000.

As you’ll come to understand when watching the $10K to $100K Challenge, I’m not one to make lofty or false promises. Instead, my success — and the success of my readers — is anchored by a simple strategy I perfected while working as a market maker on the floor of the Chicago Mercantile Exchange. This strategy works in bull markets and bear markets…

And it doesn’t matter what’s happening with AI, interest rates, midterm elections, you name it. The same process underpins every trade I make.

Click here to check out my $10K to $100K Challenge. 

Remember, the creative trader wins.

Jonathan Rose

Founder, Masters in Trading

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