Pete Najarian has spotted unusual options action in Biogen (BIIB). High volumes of November 55 call buying suggests this stock could make a sharp move higher, says Najarian. The activity could stem from speculation that this firm could be a takeover target, he adds.

Icahn hopes a buyout is the future if "we can get a good enough price." He believes that big pharma is going to take over these "large molecule" companies and that the only obstacle holding them back is the ego of the biotech companies. Icahn declined to mention a price for Biogen, except to say it should be a large premium over where it is selling today.

Look at the money flowing into Celgene (CELG) or into Abbott (ABT) and into Amgen (AMGN) and Biogen (BIIB).

Carl Icahn is nominating four directors to the board and proposing shareholder resolutions to change the company's state of incorporation from Delaware to North Dakota, the most pro-shareholder jurisdiction in the country, and to limit the size of the board to 13 members.

And he adds “BiogenIdec [BIIB] is the polar opposite trade. I think this stock is cheap. I’d buy the stock and buy a put.”

Takeover targets are wide ranging and include Biogen [BIIB], Amylin (AMLN), OSI Pharma [OSIP], and Vertex Pharma [VRTX], says Huckman.

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Icahn's recent winners include Time Warner (TWX); ImClone, which Eli Lilly (LLY) bought recently; and the Stratosphere, a Las Vegas hotel and casino that Icahn sold at a big premium. His effort to get board representation on Biogen (BIIB) came up short, however. And the jury is still out on Yahoo! (YHOO) and Motorola (MOT), in which he has large stakes and board representation.

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The Week's Shocker Stock: Stephanie Link, director of research for the Action Alerts PLUS Portfolio, unveils the shocker stock of the week and explains why it's safe even without a dividend.
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