A newly identified flesh‑eating parasite, the New World screwworm, has been detected in Texas livestock, prompting traders to anticipate potential gains for biotech firms.
Shares of Zoetis and Elanco Animal Health rose on Thursday, and previously quiet options markets for these stocks became actively bullish.
Zoetis climbed roughly 4% and Elanco rose about 2% during midday trading.
A performance chart showing Zoetis share price movement over the past five trading days is displayed below.
Zoetis shares in the past five trading days
Zoetis share price performance over the past five trading days is shown.
Zoetis experienced a surge in trading volume. The company received conditional FDA approval last year for an injectable product that treats and prevents screwworm reinfestation, and recently obtained emergency use authorization for an over‑the‑counter formulation.
Zoetis options volume surged to nearly 20 times the daily average, reaching just under 12,000 contracts, of which approximately 11,000 were calls; over 4,200 calls were purchased, 1,200 were sold, and fewer than 300 put contracts were bought.
Early trading activity centered on the $85 price level, with one trader purchasing nearly $700,000 of July‑17 $80 call options for about $5 per contract, reflecting a bullish outlook of roughly 5% upside by mid‑July.
“Screwworm is now circulating among tens of thousands of animals in Mexico,” said Scott Gottlieb, senior fellow at the American Enterprise Institute and former FDA commissioner, via text. “If cases begin to cluster or the parasite is detected in wildlife such as white‑tailed deer, the likelihood of containing the outbreak at the border declines sharply. The greatest risk persists over the next 18 to 24 months.”
Cattle futures have responded positively, gaining more than 1% on the session and extending a multiyear rally that has risen about 50% from 2024 lows. Should the parasite spread, beef supply could be pressured, yet the key issue may be whether the news alone will deter U.S. consumers from fast‑food beef purchases.
“Beef is the most widely consumed commodity in the United States, and any disruption to the supply chain could create market volatility,” noted Ben Rand, a Nebraska‑based broker for Blue Line Futures and regional director of the Federal Crop Agency. “The recent conditional‑use drug approval equips U.S. producers to manage the situation.”