While short interest in most of the leading biotechs and emerging pharmaceuticals shrank between the March 31 and April 15 settlement dates, three stocks bucked that trend.
Juno Therapeutics Inc (NASDAQ: JUNO) and Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) saw the number of their shares jump by more than 10 percent in the first two weeks of the month. Short sellers moved more cautiously into Medivation Inc (NASDAQ: MDVN) during that time.
Here we take a quick look at how these three stocks have fared recently and what analysts expect from them. That is followed by a glance at short interest moves in other leading biotech stocks.
The short interest in this biopharmaceutical company rose more than 18 percent to around 4.16 million shares, or more than 6 percent of the total float. It would take almost four days to cover all short positions. The number of shares short has been on the rise since the initial public offering in December.
This maker of cell-based cancer immunotherapies is headquartered in Seattle and has a market cap of about $4.6 billion. Some speculated in the period that Juno Therapeutics could be in a bubble. Analysts expect this company to report net losses both this year and the next. Its quiet period ends in June.
No consensus recommendation was listed, but four analysts had a mean price target that represents an expected gain of about 20 percent for the shares, though it is less than the post-IPO high. The highest individual price target is more than 31 percent higher than the current share price.
The shares rose more than 5 percent during the short interest period. However, they have dropped more than 18 percent since. They are still up about 45 percent since the IPO. Over the past six months, the stock has outperformed Vertex and the Nasdaq, though its performance has matched that of Medivation.
Short interest in this San Francisco-based company swelled less than 4 percent early in April to more than 4.35 million shares. That was the second highest number of shares year to date, and it represents less than 6 percent of the float. It would take almost 5 days to cover all short positions.
This $9.9 billion market cap biopharmaceutical company offers treatments for prostate and breast cancer. Credit Suisse recently identified some headwinds Medivation faces. The return on equity is almost 120 percent and its operating margin is higher than the industry average.
The consensus recommendation of polled analysts is to buy Medivation shares, and it has been for at least three months. They see some headroom, as their mean price target is about 7 percent higher than the current share price. That target is less than the 52-week high from a little more than a month ago.
Short sellers watched the stock rise more than 6 percent early in month, only to recover afterward and then drop again by mid-month. The stock has not only outperformed larger competitors Abbott Labs and Johnson & Johnson over the past six months, but the Nasdaq and the S&P 500 as well.
After rising only marginally in the previous period, short interest in this Cambridge, Massachusetts-based company swelled more than 10 percent to total around 4.63 million shares. That was about 2 percent of the total float. It would take about two days to cover all short positions.
Vertex manufactures small molecule drugs for the treatment of serious diseases such as hepatitis C and cystic fibrosis. It has a market cap of about $31 billion and has been a rumored takeover target. Note that its return on equity and operating margin are both in the red.
About half of the 27 analysts surveyed recommend buying shares of Vertex, with seven of them rating the stock at Strong Buy. The mean price target is about 4 percent higher than the current share price. Note though that shares traded higher than that consensus target last week.
The stock increased more than 6 percent during the two-week period, compared to a less than 2 percent gain for the Nasdaq in that time. Vertex has not only outperformed larger competitor Merck over the past six months, but the Nasdaq and the S&P 500 as well.
The number of shares short in Celgene and Gilead Sciences was about the same at the beginning and end of the two-week period.
Short sellers shied away from Alexion Pharmaceuticals, Amgen, Biogen, BioMarin Pharmaceutical, Illumina, Incyte and Seattle Genetics in that time, though.
At the time of this writing, the author had no position in the mentioned equities.
Keep up with all the latest breaking news and trading ideas by following Benzinga on Twitter.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
See original article: