Drug stocks ADXS, NOVN, and PTCT are moving higher
Biotech stocks are among the big movers this morning, even as expectations for a March interest-rate hike weigh on the broader market. Three names gaining ground are Advaxis, Inc. (NASDAQ:ADXS), Novan Inc (NASDAQ:NOVN), and PTC Therapeutics, Inc. (NASDAQ:PTCT). Below, we'll take a look at what's boosting shares of ADXS, NOVN, and PTCT, and how traders may be feeling.
FDA Nod Sets Advaxis Stock on Fire
News the U.S. Food and Drug Administration (FDA) has cleared its cancer immunotherapy drug, ADXS-NEO, for human testing has sent shares of ADXS up 5.9% to $9.76, helping the stock break out above recent resistance in the $9-$9.50 region. The rally has ADXS up more than 36% year-to-date. But while analysts are firmly in the drugmaker's bullish corner, today's gains could have short sellers sweating. At present, 29% of Advaxis, Inc.'s float is wrapped up in these bearish bets, representing more than three weeks' worth of trading, at the stock's average daily volumes.
Drug Update Gives Novan a Much-Needed Boost
NOVN popped 28% out of the gate, but pared its gains quickly, last seen up 10.3% at $7.05. Boosting the shares is a positive update on the company's acne drug, SB204, with Novan Inc aiming to submit a new drug application (NDA) to the FDA early next year. NOVN is a relative newcomer to the stock market, trading publicly for just over five months. In that time, the shares have seen some trouble, shedding over 60% from their first-day close of $18.10. As such, it's not surprising short sellers have been piling on lately. In fact, these pessimistic positions more than doubled in the most recent two-week reporting period.
PTC Therapeutics Pops on DMD Drug News
PTCT is 3.5% higher at $10.15 on news the FDA approved a review of the company's Duchenne muscular dystrophy (DMD) drug,
Translarna. The shares could stand to see a lot more upward action, though, as they currently sit below the year-to-date breakeven level, thanks to a recent round of downbeat drug news and bearish analyst attention. While short interest on PTC Therapeutics, Inc. is elevated, options traders have taken an unusually strong liking to long calls. Across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio sits at a top-heavy 10.31 -- near the top third of all readings taken in the past year. Of course, a portion of these call buyers could be PTCT short sellers hedging against upside risk.
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