Among the leading biotech and emerging pharmaceutical companies, Incyte (NASDAQ: PCYC) saw the largest percentage declines in short interest between the January 15 and January 31 settlement dates.
Short sellers shied away from Alexion Pharmaceuticals, Amgen, Biogen Idec, Dendreon, Medivation, Questcor Pharmaceuticals and Vertex Pharmaceuticals in the final weeks of the month.
Bucking the trend, BioMarin Pharmaceutical (NASDAQ: BMRN) saw the most significant upswing in the number of shares sold short. And Gilead Sciences, Celgene and Illumina saw modest growth in short interest during the period.
Below we take a closer look at how BioMarin Pharmaceutical, Incyte and Pharmacyclics have fared and what analysts expect from them.
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After rising about nine percent in the previous period, the number of shares sold short in this biopharmaceutical company increased again by more than eight percent to total more than 4.30 million. That represented about three percent of the total float. The days to cover was more than four.
BioMarin offerings include Naglazyme and Kuvan. This San Rafael, California-based company now has a market capitalization near $10 billion. The forecast for the current quarter calls for the largest quarterly net loss in the past year. But the long-term earnings per share (EPS) growth forecast is about 25 percent.
Nine of the 24 analysts surveyed by Thomson/First Call rate the stock at Strong Buy, and eight more also recommend buying shares. They see some headroom for shares, as their mean price target is almost 10 percent higher than the current share price. That consensus target would be a new 52-week high.
Shares have risen about 10 percent in the past week, recovering from a pullback earlier in the month. The share price is north of the 50-day and 200-day moving averages. BioMarin has outperformed competitor Amicus Therapeutics and the S&P 500 in the past six months.
This biopharmaceutical company saw short interest shrink more than 10 percent during the period to around 6.18 million shares, or about four percent of the available shares. Short interest has fallen for five straight periods. It would take about four days to close out all short positions.
This Wilmington, Delaware-based company is focused on small molecule drugs for oncology and inflammation, and its pipeline prompted an analyst's upgrade during the period. Incyte's market cap is around $11 billion, and the return on equity is about 44 percent.
Of the 17 analysts polled, seven rate the stock at Strong Buy and seven more also recommend buying shares. Yet, their mean price target, or where they expect the share price to go, is less than the current share price, indicating that they see no upside potential at this time.
The share price is up more than 11 percent in the past week, and it is more than 142 percent higher than six months ago. The stock has outperformed not only the broader markets over the past six months, but larger competitors Amgen and Celgene as well.
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Short interest in this clinical-stage biopharmaceutical company retreated more than 15 percent in late January to around 1.39 million shares. That is the lowest number of shares sold short since November, and the days to cover was more than one. Short interest was more than two percent of the total float.
This Sunnyvale, California-based company focuses on the development and commercialization of small-molecule drugs for the treatment of cancer and immune mediated diseases. The consensus EPS estimate for the most recent quarter is up about 26% in past 60 days. The market cap is now about $10 billion.
For at least three months, the consensus recommendation has been to buy Pharmacyclics shares. The analysts' mean price target represents less than six percent potential upside, relative to the current share price. That consensus price target is less than the recent 52-week high.
The share price is up more than 22 percent since the beginning of the year and above the 50-day and 200-day moving averages. Over the past six months, Pharmacyclics has outperformed not only larger competitor Merck, but the broader markets as well.
At the time of this writing, the author had no position in the mentioned equities.
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