How to Trade This $2 Billion Biotech Name Moving Quickly Toward Profit
Here’s our covered-call idea.
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The first full trading week of September was an eventful one.
There was the 25th anniversary of the 9/11 attacks on Friday. Hostilities also escalated notably across the Middle East. This pushed oil up sharply with Brent and WTI both breaching the $100 a barrel threshold this week. Average diesel fuel prices hit the $6 per gallon level for the first time in U.S. history. The yield on the 10-year treasury moved ever closer to the key 5% mark.
Despite all of this, the U.S. equity markets remained quite resilient. And while the music is playing, one has to dance to a tune every now and then. Today, I am teeing up a biotech name that became the latest addition to my portfolio late this week via covered call orders.
Our target this weekend is UroGen Pharma Ltd. (URGN). The stock currently trades in the low $40s and sports a market valuation just north of $2 billion.
The company has two FDA-approved products on the market. The first goes by the brand name Jelmyto. It approved to treat adults with low-grade upper tract urothelial cancer. It should deliver roughly $100 million of sales in FY2026 and is growing sales in the low to mid-single digits. UroGen recently settled litigation with Teva Pharmaceuticals (TEVA) around the Israeli generic juggernaut from launching a generic version of Jelmyto for now. That said, the drug will face generic competition over the next few years.
The key asset of UroGen is called Zusduri. The product garnered FDA approval in mid-2025 to treat recurrent non-muscle-invasive bladder cancer. In a late-stage study, Zusduri delivered an impressive 80% complete response rate. Among these responders, 64.5% were completely disease free three years later. Zusduri is a minimally invasive alternative to surgery in patients whose low-grade bladder cancer has returned following definitive therapy.
This kind of bladder cancer impacts some 80,000 Americans annually, of which some 60,000 have a recurrence. Of note, UroGen has already submitted an NDA this August around a candidate (UGN-103) targeting this indication built on Zusduri’s foundation. In addition, a Phase 3 trial will commence soon that will evaluate UGN-103 to treat high-risk non-muscle invasive bladder cancer.
Zusduri has seen an impressive sales trajectory since hitting the market. Zusduri sales in Q2 came in just above $50 million. This was subsequently up 73% from Q1. The current analyst firm consensus has the company narrowing its loss to a quarter a share in FY2026. It then sees UroGen producing a profit of just over $2.75 a share in FY2027, with earnings approaching seven bucks a share in FY2030.
Four analyst firms including Oppenheim reiterated Buy ratings in August following the posting of second quarter results. Three of these contained significant upwardly revised price targets which ranged from $58 to $75 a share following revisions. With the stock trading around $42.50 a share, that implies solid potential appreciation ahead. Here is how I added exposure to this small cap biotech within my portfolio this week.
Option Strategy
Here is how one can initiate a position in URGN utilizing a covered-call strategy. Selecting the February $40 call strikes, fashion a covered call order with a net debit in the $33.50 to $34.50 a share range (net stock price – option premium).
This strategy provides downside protection of 19% over the trade’s duration.This strategy also provides nearly 18% return potential, even if the stock trades down 5% over its option duration.
At the time of publication, Jensen was long URGN.
