Short Sellers Remain Vigilant Against Biotechs

Health and Healthcare

Published: September 11, 2014 9:20 am

The short interest report is out for the August 29 settlement date, and 24/7 Wall St. is focusing on the biotech sector. Short sellers are often active in biotech stocks, and we have seen some excessive short interest activity in this report. We have compared the current date to the previous settlement dates and have also looked back over the past year to cover these trends. As you will see, short sellers remain quite vigilant in their bets against biotechs.

Alexion Pharmaceuticals Inc. (NASDAQ: ALXN) had its short interest fall to 3,859,897 shares as of August 29, which was 4.8 days to cover. The short interest was 4.033,545 shares on August 15 and 3,955,671 as of late July. These last readings come in as three of the four highest readings of the year.

Amgen Inc. (NASDAQ: AMGN) saw its short interest rise to 11,855,076 with 4.48 days to cover, up from the mid-August short interest of 10,819,524 shares. This continues an increasing trend from July when short interest was 9,538,010 on the 31st and 8,366,394 on the 15th. The current reading is the highest reading the company has had in the past 52-weeks.

Biogen Idec Inc. (NASDAQ: BIIB) saw its short interest fall to 3,181,905 with four days to cover, this is down from the mid-August short interest of 3,312,332. The short interest for July read at 2,963,165 for the 31, and 3,191,088 for the 15. Comparatively, mid-August had the highest short interest over the past year, and the current reading has the fourth-highest reading. This short interest may seem small here on the surface, but that may be due to a more than $332 share price.

Celgene Corp. (NASDAQ: CELG) saw its short interest increase to 13,611,110 with 3.39 days to cover, up from the mid-August reading of 13,046,823 shares. The short interest for late July was 13,239,439, and for mid-July it read at 13,017,918. The highest reading of the year was in June at 14,958,160.

Gilead Sciences Inc. (NASDAQ: GILD) saw its short interest fall sharply to 75,491,965 with 5.26 days to cover, down over 15 million down from the mid-August level of 90,068,658. The short interest for late July read at a yearly high of 98,473,543 shares. The current reading marks the lowest point for the 2014 calendar year. The Sovaldi controversy must be truly abating — or so a $108 stock price would indicate.

Mannkind Corp. (NASDAQ: MNKD) had its short interest fall to 74,067,605 as of August 29 from 77.34 million shares short on August 15. What stands out here is that the days to cover has jumped handily to 12.33 days, now that volume has petered out. This has been above 70 million shares short for four periods in a row, which is more than just elevated. The bet is that the stock can keep falling, even if it is under $7.

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