Will These Biotech Stocks Continue To Exhibit Bullish Momentum?
GameStop (NYSE: GME) has become the name on the minds of everyone on Wall Street in the past week. From GameStop to silver-related stocks, the attention now seems to have spread to the biotechnology sector. For instance, Novavax (NASDAQ: NVAX), a heavily-shorted biotech stock, has also garnered interest across chat forums. On one hand, it could be because its COVID-19 vaccine is 89.3% effective. But most would also agree that the short position on Novavax of $1.5 billion could be another reason why it’s been on the rise in the past few sessions. Biotech stocks with little to no revenue have long been the focus of short bets on Wall Street and could be a new avenue for retail investors betting against hedge funds.
The Biotechnology Sector May Be A Better Candidate For A Short Squeeze Than Silver
Since last weekend, many tweets and stock price movements on Monday seem to suggest that iShares Silver Trust (NYSEARCA: SLV) could be the center of attention this week. While possible, there’s a structural element that makes replicating GameStop’s silver short squeeze a lot more difficult. Perhaps, Reddit investors may have already known by now. Hence, they are now rallied around to call to start a “#BioWar” on the bears behind a list of heavily-shorted biotech stocks. Whether or not Reddit investors’ interest in biotech stocks could really take off on the scale of GameStop remains to be seen. However, if you believe it will eventually take place, here’s a list of top biotech stocks that may be looking at a short squeeze soon, if it hasn’t already begun.
Top Biotech Stocks To Watch Right Now
- BioCryst Pharmaceuticals (NASDAQ: BCRX)
- Corbus Pharmaceuticals (NASDAQ: CRBP)
- Inovio Pharmaceuticals (NASDAQ: INO)
- Vaxart (NASDAQ: VXRT)
First up, BioCryst Pharmaceuticals blew past a five-year high as it was the one Reddit investors rallied around a call to start a “#BioWar”. The company, which recently ended development of an experimental therapy for COVID-19, rallied to close 39.08% higher on Monday. This came after a poster on Reddit’s WallStreetBets forum called it “the most undervalued stock in the market”. The real question here we all have in mind is, could BCRX stock be the top biotech stock for massive gains this week as Reddit investors turn their eyes on it? Judging from the post-market activities, it seems that we could be looking at a bullish trend continuing this week. Why not add it to your watchlist to find out?
The short squeeze has been a hot topic of conversation in the stock market today. With BCRX soaring to a new five-year-high, it seems to suggest that those shorts are already starting to be squeezed. There’s also a great chance that the short squeezing would continue further down the week. And if this isn’t enough, the increase of BlackRock’s stake in BCRX stock might be the news to win you over. Investors may be excited about the short squeeze that’s happening today. Some simply are excited because big money has taken interest in BCRX stock. Either way, BCRX stock remains a top biotech stock to watch this week.
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Next up, clinical-stage biotech Corbus Pharmaceuticals is also feeling the apparent squeeze. The stock closed 21.86% higher on Monday and made 25% further gains in the post-market trading. There wasn’t any specific news that could trigger such a spike in the stock price as late. The major disappointment from the company in September last year saw its stock price plummeted nearly 80% overnight. Without strong fundamentals, it is prone to attack from short-sellers. But it is also for this very reason, it’s an attractive biotech stock to watch this week.
Even though the trials did not meet their endpoints, it wasn’t all bad news. In fact, there were plenty of positives that came out from lenabasum studies. For one, the company gained insightful data which still leads management to believe there’s a chance to commercialize the drug. Sure, the disappointment of not meeting its endpoints may mean that Corbus has to undergo significant restructuring to keep its balance sheet healthy. After CRBP stock was left for dead for a few months, the recent event has turned it alive. But for it to soar to its level in August, the company might need positive clinical data to send that stock higher.
Another biotech stock that catapults higher on Reddit call is INO stock. On Monday, the company saw its stock price close 33.02% higher. INO is one of the most highly shorted biotechs and among the top 25 shorted stocks in terms of short interest. Like BioCryst Pharmaceuticals, BlackRock has also increased its stake in Inovio, a company that focuses on the development and commercialization of synthetic DNA products for treating infectious diseases and cancers. The company is committed to powering a new way forward in DNA medicine. With 15 clinical programs in its pipelines, the company is one biotech stock that could be worth your attention.
Also, the company’s VGX-3100 drug demonstrated a clinically significant reduction of HPV-16/18-associated precancerous vulvar lesions in 63% of treated participants six months after treatment. According to analysts, the drug could generate over $600 million annually in worldwide sales by 2024. This would of course be a significant increase from what the company is generating in sales today. All things considered, is INO stock a top biotech stock to buy right now?
Vaxart may not be top on Reddit investors’ radar, but its momentum on Monday is no less exciting. Unlike the other biotech stocks on this list, Vaxart stock surged nearly 30% higher on Monday, not because of short squeeze-related matters. Instead, the increase came after two board members resigned. Steven Boyd and Keith Maher of Armistice, which made a fortune from the pre-pandemic investment in Vaxart, have left the company’s board.
Another potential catalyst coming up this week from Vaxart has to do with its COVID-19 vaccine candidate. The company expects to release data from its Phase 1 trial. The candidate has previously demonstrated encouraging preclinical data. Assuming Vaxart’s vaccine candidate is able to prove its efficacy in later-stage trials, the stock will likely regain the attention of investors. Nevertheless, the risk is that many other vaccine candidates could receive approvals prior to Vaxart. As speed is crucial in rolling out the vaccines, does VXRT stock have what it takes?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.