Arena: a potential 5:1 speculative bet

Arena (ARNA) is one of the famous small biopharma companies, focusing on developing weigh-loss drugs. It has tried for years and the most recent one was last year when the FDA turned down their application also. However, they are coming back again and believe or not, this time they got the FDA advisory board 18 to 4 backup for approval. So there is a good chance that this time they may be lucky enough to get their drug approved. The expected decision is Jun 27. So the ARNA stock just keeps shooting up in the past few weeks, almost a straight line up (see below)

Of course, I'm not predicting they will fail but what if just in case the FDA turns them down again? After all, it is not a miracle drug and still has some safety concerns. If indeed ARNA gets a negative ruling, its shares will plunge to where it was around $2-3. So if you are a risk-taker, you may want to buy some put options to bet against the most of the herds. The risk-profit ratio could be as high as 1:5 or even more. It sounds an interesting risk to take to me.