After largely rising in the previous period, short interest in
biotech and emerging pharmaceutical companies was mixed in the
final two weeks of September. Shares sold short in Amgen (NASDAQ:
), Arena Pharmaceuticals (NASDAQ:
), Dendreon (NASDAQ:
), Illumina (NASDAQ:
), Onyx Pharmaceuticals (NASDAQ:
) and Vertex Pharmaceuticals (NASDAQ:
) grew somewhat between the September 14 and September 28
settlement dates. But short interest in Alexion Pharmaceuticals
), Pharmacyclics (NASDAQ:
), Regeneron Pharmaceuticals (NASDAQ:
) and VIVUS (NASDAQ:
) declined during that time.
Three stocks saw larger swings in short interest between the
September 14 and September 28 settlement dates. They were Biogen
), Celgene (NASDAQ:
) and Gilead Sciences (NASDAQ:
This S&P 500 component saw short interest dwindle almost
16 percent to 1.87 million shares, its lowest level this year.
Biogen Idec develops and markets therapies for the treatment of
neurodegenerative diseases, hemophilia and autoimmune disorders.
In late September Biogen Idec posted positive data from the study
of a hemophilia drug that could replace one by Pfizer (NYSE:
). The company has a market capitalization of almost $35 billion
and a return on equity of nearly 22 percent. The long-term
earnings per share (
) growth forecast is about 14 percent. But short interest is
still less than one percent of the float. Sixteen of the 26
analysts polled by Thomson/First Call rate the stock at Buy or
Strong Buy. They believe the stock has a little room to run as
the mean price target is about five percent higher than the
current share price. But note that is less than the recent
multiyear high. Over the past six months, the stock has
outperformed Pfizer, as well as the broader markets.
Short interest in this New Jersey-based company plunged 18.8
percent to 4.91 million shares, its lowest level in a year.
Celgene develops various therapies to treat cancer and
immune-inflammatory related diseases, primarily in the United
States and Europe. In late September, the company climbed to the
number 91 spot on the S&P 500, overtaking Capital One (NYSE:
). It now has a market cap of almost $38 billion. The return on
equity is about 26 percent and the long-term EPS growth forecast
is more than 22 percent. Short interest is less than two percent
of the float. Of the 28 polled analysts who follow the stock, 22
recommend buying shares; 13 of them rate it at Strong Buy. But
their mean price target, or where they expect the share price to
go, is less than four percent higher than the current share
price. Shares have pulled back from a recent multiyear high. Over
the past six months, Celgene has underperformed Johnson &
) and the S&P 500.
Shares sold short in this California-based biopharmaceutical
company jumped 26.3 percent to 26.05 million. Average daily
volume was the highest it has been since February. This maker of
therapeutics for the treatment of life-threatening diseases such
as HIV and hepatitis has a market cap of more than $51 billion.
Enthusiasm over the company's new HIV medication prompted
analysts to boost their price targets in September. Gilead
Sciences too is an S&P 500 component, and its return on
equity is more than 36 percent. The long-term EPS growth forecast
is more than 15 percent and short interest is less than three
percent of the float. Out of 29 analysts surveyed by Thomson
Reuters, 22 rate the stock at Buy or Strong Buy; none recommend
selling shares. But their mean price target indicates upside
potential of less than five percent. The share price has pulled
back about three percent from a recent multiyear high. Over the
past six months, the stock has outperformed competitor
) and the broader markets.
Exchange traded fund iShares Nasdaq Biotechnology (NASDAQ:
) includes Biogen Idec, Celgene and Gilead Sciences among its top
10 holdings. Shares are up more than 34 percent year today,
despite pulling back more than three percent in the past week.
SPDR S&P Biotech (NYSE:
) also includes Gilead Sciences as a top holding, and it is up
more than 39 percent year to date, despite a similar
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