The short interest in biotech and emerging pharmaceutical
companies was mixed again in the final two weeks of November.
Shares sold short in Alexion Pharmaceuticals (NASDAQ:
), Illumina (NASDAQ:
) and Regeneron Pharmaceuticals (NASDAQ:
) grew somewhat between the November 15 and November 31
But short interest in Amgen (NASDAQ:
), Arena Pharmaceuticals (NASDAQ:
), Dendreon (NASDAQ:
), Gilead Sciences (NASDAQ:
), Onyx Pharmaceuticals (NASDAQ:
), Pharmacyclics (NASDAQ:
) and Vertex Pharmaceuticals (NASDAQ:
) declined during that time.
Three stocks saw larger swings in short interest between the
November 15 and November 31 settlement dates. They were Biogen
), Celgene (NASDAQ:
) and VIVUS (NASDAQ:
This S&P 500 component saw short interest rise more than
12 percent to 2.65 million shares, its third period of growth and
the highest it has been since June. But short interest remains a
little more than one percent of the float.
The company develops and markets therapies for the treatment
of neurodegenerative diseases, hemophilia and autoimmune
disorders. In late November, Biogen Idec opened a new facility at
its Research Triangle Park Campus in North Carolina. The company
has a market capitalization of about $36 billion and a return on
equity of more than 21 percent. The long-term earnings per share
) growth forecast is about 15 percent.
Fourteen of the 25 analysts surveyed by Thomson/First Call
recommend buying shares. But they believe the stock has little
room to run as their mean price target is a little over three
percent higher than the current share price. But that target
would be a new multiyear high. Over the past six months, the
stock has narrowly underperformed larger competitor Pfizer (NYSE:
) but it has outperformed the S&P 500.
Shares sold short in this biopharmaceutical company jumped
about 33 percent to 6.12 million. That was the highest number of
shares sold short since August. The short interest is less than
two percent of the float.
This maker of therapies to treat cancer and
immune-inflammatory related diseases has a market cap of more
than $34 billion. Celgene is an S&P 500 component, and in
November one of its directors was charged with insider trading.
The company's return on equity is more than 28 percent, and the
long-term EPS growth forecast is more than 13 percent.
Out of 27 analysts polled, 12 rate the stock at Strong Buy and
seven others also recommend buying shares. The mean price target
indicates upside potential of about seven percent and would be a
new multi-year high. Shares are up about 30 percent in the past
six months. In that time, the stock has outperformed the likes of
Johnson & Johnson (NYSE:
), as well as the S&P 500.
Short interest in this Mountain View, California-based company
increased more than nine percent to 22.03 million shares. That
was the fourth consecutive period of increases and the largest
number of shares sold short this year. Short interest is about 22
percent of the float.
VIVUS therapies address obesity, sleep apnea, diabetes and
male sexual health. One of its largest shareholders called for a
sale of the company in mid-November. The company now has a market
cap of about $1.2 billion. The long-term EPS growth forecast is
about 51 percent, but the return on equity is in negative
Seven of the 12 surveyed analysts who follow the stock
recommend buying shares. Their mean price target, or where they
expect the share price to go, is almost 50 percent higher than
the current share price. But that may be because shares have
retreated more than 61 percent from the 52-week high back in
July. Over the past six months, VIVUS has underperformed larger
competitors Eli Lilly (NYSE:
) and GlaxoSmithKline (NYSE:
), as well as the broader markets.
Exchange traded fund iShares Nasdaq Biotechnology (NASDAQ:
) includes Biogen Idec and Celgene among its top 10 holdings.
Shares are up about 34 percent year to date, despite a pullback
in October. SPDR S&P Biotech (NYSE:
) also includes Celgene as a top holding, and it is up more than
36 percent year to date, despite also pulling back in
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