Amgen, BioMarin Lead Biotech Short Interest Trend (AMGN, BIIB, BMRN)

February 27, 2014 12:26 pm
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Among the leading biotech and emerging pharmaceutical companies, Amgen (NASDAQ: AMGN), Biogen Idec (NASDAQ: BIIB) and BioMarin Pharmaceutical (NASDAQ: BMRN) saw the largest percentage increases in short interest between the January 31 and February 15 settlement dates.

Alexion Pharmaceuticals, Celgene, Gilead Sciences, Illumina, Incyte and Pharmacyclics saw more modest growth in the number of shares sold short during the period. Short interest in Dendreon was about the same as in the previous period.

Short sellers shied away from Medivation, Questcor Pharmaceuticals and Vertex Pharmaceuticals in the first weeks of the month.

Below we take a closer look at how Amgen, Biogen Idec and BioMarin Pharmaceutical have fared and what analysts expect from them.

See also: France’s Biosimilar Substitution May Lead to Erosion of Amgen


This California-based biotechnology medicines company saw short interest grow about 10 percent to 10.72 million shares, the greatest number of shares sold short since last March, and more than one percent of the float. The days to cover rose to more than three during the period.

The company develops and markets human therapeutics based on advances in cellular and molecular biology for grievous illnesses. It announced a positive phase III trial at the end of January. Amgen has a market capitalization of about $92 billion and a dividend yield near 1.9 percent.

Of the 27 analysts who follow the stock that were surveyed by Thomson/First Call, 13 recommend buying shares, and the rest rate it at Hold. The mean price target, or where analysts predict the share price will go, is about six percent higher than the current share price.

The share price is about five percent higher than a month ago, and it reached a 52-week high early in the week. Over the past six months, the stock has not only underperformed competitor Teva Pharmaceutical, but the S&P 500 as well.

Biogen Idec

This S&P 500 component saw its short interest rise more than nine percent during the period to more than 2.85 million shares. That took back most of the decline in the previous period, and it represented more than one percent of the total float. The days to cover remained less than two.

The company develops and markets therapies for the treatment of neurodegenerative diseases, hemophilia and autoimmune disorders, and in February it named a new chairman of the board. The market cap is more than $81 billion, and the long-term earnings per share (EPS) growth forecast is more than 18 percent.

The consensus recommendation of the 29 analysts polled is to buy shares. The current share price has overrun their mean price target, meaning they see no upside potential at this time. The street-high price target is more than 17 percent higher than the current share price.

The share price is up more than 16 percent in the past month, even though it has pulled back a bit after recently reaching a new multiyear high. Over the past six months, Biogen Idec’s stock has outperformed not only the broader markets, but larger competitor Pfizer as well.

BioMarin Pharmaceutical

After rising about eight percent in the previous period, the number of shares sold short in this biopharmaceutical company surged by more than 46 percent to total more than 6.30 million. That represented more than four percent of the total float. The days to cover was less than five.

BioMarin offerings include Naglazyme and Kuvan. This San Rafael, California-based company now has a market cap of more than $11 billion. It just posted a larger-than-expected net loss for the fourth quarter. The long-term EPS growth forecast is about 25 percent.

Nine of the 23 analysts surveyed rate the stock at Strong Buy, and seven more also recommend buying shares. They see little headroom for shares, though, as their mean price target is only marginally higher than the current share price. But that consensus target would be a new 52-week high.

Shares have risen about 19 percent in the past month and they are trading near a 52-week high. 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 over the past six months.

See also: Esperion Therapeutics to Provide ETC-1002 Program Update; Fourth Quarter and Full Year 2013 Financial Results

At the time of this writing, the author had no position in the mentioned equities.

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