Short Sellers Dump Amgen And Baxalta
- Short interest in many of the leading biotech stocks shrank in the most recent period.
- Two stocks in particular stood out as leaders of that trend in those two weeks.
- Shares of one of those two stocks rose while the other slumped during the period.
Short sellers moved on only a few of the leading biotechnology stocks as the markets reached new highs in late April. The short interest in many of the stocks in the industry pulled back between the April 15 and April 29 settlement dates.
Amgen, Inc. (NASDAQ: AMGN) and Baxalta Inc (NYSE: BXLT) in particular saw double-digit percentage declines in the number of their shares short, in a period in which the former posted better-than-expected first-quarter results, and the acquisition of the latter by Shire moved ahead.
The handful of companies that saw rises in their short interest include Gilead Sciences, Illumina, Incyte and Vertex Pharmaceuticals, while the number of shares short in BioMarin Pharmaceutical, Medivation and Opko Health hardly changed at all between the settlement dates. The final weeks of the month also brought shrinking numbers of shares short at the likes of Acadia Pharmaceuticals, Alexion Pharmaceuticals, Biogen, Celgene, Juno Therapeutics and Seattle Genetics.
Below is a quick look at how Amgen and Baxalta have fared recently and what analysts expect from them.
The number of shares sold short in this multinational biopharmaceutical company plunged almost 17 percent late last month to more than 7.36 million, or 1.0 percent of the float. That was the lowest level of short interest in the past year. The days to cover remained at less than three, even as the average daily volume declined for the third straight period.
The Thousand Oaks, California-based company recently topped earnings estimates and boosted its profit outlook for the year. During the short interest period, shares rose more than 2 percent, but they ended the month down around 1 percent. The Nasdaq lost more than 3 percent in the same period.
This hemophilia-, immunology- and oncology-focused biopharmaceutical company saw its short interest retreat more than 17 percent to more than 8.19 million shares, or 1.3 percent of float. The previous reading was the highest number of shares short so far this year. At the latest average daily volume, it would take more than a day to cover all short positions.
Shire said in early April that the acquisition would close as planned, despite new government measures aimed at blocking tax inversion deals. Baxalta's share price ended the two-week short interest period more than 3 percent higher than where it began. The stock now is up about 7 percent year-to-date.
Disclosure: At the time of this writing, the author had no position in the mentioned equities.
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