(Adds analyst comments, updates share price)
By Doris Frankel and David Gaffen
CHICAGO/NEW YORK May 15 Shares of drugmaker Bristol-Myers Squibb Co rose to a 10-year high on Wednesday ahead of results of an early stage trial for its new melanoma treatment, with heavy betting in the options market suggesting investors see more gains in the stock.
Bristol-Myers shares were up 5.1 percent at $44.35 shortly before the close on Wednesday, in their busiest day of trading since August. The rise came shortly before the release of the American Society of Clinical Oncology (ASCO) 2013 Annual Meeting abstracts on Wednesday night. At one point the stock hit $45.59.
Hopes were high for the melanoma treatment, which combines the company's Yervoy drug and an experimental treatment known as Nivolumab, part of a closely watched class of new therapies that harness the immune system to fight cancer known as PD-1 blockers.
More than 31 million shares of the stock changed hands on Wednesday and the options market was active, with overall volume more than nine times the daily average, according to options analytics firm Trade Alert.
The ASCO abstracts will be released from embargo at 6 p.m. EDT (2200 GMT)
"One can only speculate some of that data has leaked - I am not privy to any leaked data, but that could be what's going on," Mark Schoenebaum, analyst at ISI Group, told clients in a conference call earlier on Wednesday.
Traders appeared to be snapping up calls, establishing near-term bullish positions on the stock to position for further gains in the share price, according to Interactive Brokers Group options analyst Caitlin Duffy.
Most of the action was focused on front-month May and June calls with intraday call volume exceeding open interest across several strike prices, Duffy said. Overall option volume on BMY was 9.5 times the daily average with 69,000 calls and 46,000 puts traded late on Wednesday, according to Trade Alert.
Call options give the buyer the right to purchase a stock at a given price by a certain date and are often used to express a bullish outlook. The May $45 strike calls were particularly active, with many bought for an average premium of 54 cents each, making them profitable if the stock settles above $45.54 by expiration at the end of this week.
The ASCO annual meeting begins on May 31 in Chicago. (Additional reporting by Julie Steenhuysen in Chicago and Bill Berkrot in New York; editing by Nick Zieminski and Matthew Lewis)