I've tried to capture the IV in these Pharmaceuticals before, and it really is just a toss of a coin as to whether you come out the right side. Have a look at GNTA. An announcement last May didn't come out as expected, and despite being able to sell IV at over 300% (not a typo!) I was lucky to exit with only a small loss when price collapsed. APPX has a history of moving $5 - $10 in very short periods of time which is why IV is so high. If you sell a straddle, although the breakeven points will be temptingly far apart, chances are that anything other than a neutral announcement will bring them under threat. Likewise, buying a straddle or a strangle will require heavy investment in premium which will evaporate following the volatility crush that inevitably will follow the announcement and you'll need a mega-move to make any money.
If you HAVE to trade it, I think I'd consider buying an OTM strangle in a far month and sell some butterflies in a near month to help cover some of the premium spent on the strangle. If there is no move, the butterflies will recoup some of the premium lost on the strangle, and if there is a large move in either direction losses on the butterfly will be limited with unlimited profit potential on the strangle. This is all very well in theory but a b***** to make work in practice. I've learned the hard way to leave these alone and to get my profits elsewhere!
