Short Sellers Back Off Big Pharma

Health and Healthcare

Published: June 10, 2015 8:30 am

The short interest data has been released for the May 29 settlement date. Pharmaceutical companies are usually involved in a lengthy process in getting their drug candidates to market through clinical trials. There is a fair amount of risk involved, should a study come back negative or a candidate not be approved. Conversely, if a drug is approved or passes a clinical trial, there can be big upside.

The May 29 short interest data have been compared with the previous figures, and for the selected stocks, short interest is down with the exception of one.

Pfizer Inc. (NYSE: PFE) saw its short interest decrease to 62.91 million shares from the previous 74.37 million. In February, short interest spiked incredibly, and since that time it has slowly backed off. The highest short interest reading on the year was 207.4 million. Shares of Pfizer closed Tuesday at $34.01, within a 52-week trading range of $27.51 to $35.53.

Merck & Co. Inc. (NYSE: MRK) saw its short interest decrease to 31.49 million shares from 32.07 million in the previous period. The current reading is one of the highest in the past 52 weeks and the third highest reading year to date. Merck shares closed Tuesday at $58.84, in a 52-week trading range of $52.49 to $63.62.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) short interest fell to 6.47 million shares. The level for the previous settlement date was 7.02 million. Prior to the past few readings, shares had not been over the 7 million mark since last June. Shares of Teva closed Tuesday at $60.05, in a 52-week range of $47.36 to $68.75.

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Bristol-Myers Squibb Co. (NYSE: BMY) saw its short interest fall to 22.12 million shares from the previous reading of 23.09 million. The past few readings, including the current one, are the lowest short interest on the year. It is also worth mentioning that the stock has pushed higher recently as short interest has backed off. Bristol-Myers shares closed Tuesday at $65.08, within a 52-week trading range of $46.50 to $69.86.

AbbVie Inc. (NYSE: ABBV) short interest skyrocketed to 92.46 million shares from the previous level of 29.57 million. Short interest is at its highest level year to date, and the fifth highest in the past 52 weeks, with the highest reading at 111.88 million. Shares of AbbVie closed Tuesday at $67.67, in a 52-week trading range of $51.37 to $70.76.

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