Health and Healthcare

Short Interest Bets Increase on Major Pharma

Chris Lange

Published: November 10, 2016 7:40 am

Last Updated: January 12, 2020 5:58 pm

The short interest data have been released for the October 31 settlement date. Pharmaceutical companies usually are 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.

Drug prices have been under pressure due to the campaign rhetoric. But now that the election is over and Hillary Clinton—the one of the main antagonists of these companies—is no longer running, the pressure has seemingly let up, if just slightly for the moment.

The October 31 short interest data have been compared with the previous figures, and short interest increased in most of selected pharmaceutical stocks.

Keep in mind that short sellers betting against big pharma are taking on an added risk. They have to pay out the ongoing high dividends on top of the cost of borrowing the shares.

Pfizer Inc. (NYSE: PFE) saw its short interest increase to 47.03 million shares from the previous 46.55 million. Shares of Pfizer closed Wednesday at $32.12, within a 52-week trading range of $28.25 to $37.39.

Merck & Co. Inc. (NYSE: MRK) saw a decrease in the number of its shares short to 23.36 million, from 27.18 million in the previous period. Its shares closed Wednesday at $64.18, in a 52-week range of $47.97 to $65.00.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) short interest increased to 15.44 million shares. The previous level was 13.95 million. Shares closed Wednesday at $39.97, in a 52-week range of $37.82 to $66.55.

Bristol-Myers Squibb Co. (NYSE: BMY) saw its short interest remain relatively flat at 13.13 million shares, compared to the previous reading of 13.14 million. Shares closed Wednesday at $56.30, within a 52-week range of $49.03 to $77.12.

AbbVie Inc. (NYSE: ABBV) short interest increased slightly to 28.63 million shares, compared to the previous 28.25 million. Shares of AbbVie closed Wednesday at $62.64, in a 52-week trading range of $50.71 to $68.12.