Health and Healthcare

Short Sellers Back Off Major Pharma Stocks

Chris Lange

Published: September 13, 2018 9:55 am

Last Updated: January 11, 2020 5:59 pm

Pharmaceutical companies usually are involved in a lengthy process of 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 gains FDA approval or passes a clinical trial, there can be big upside.

The White House has promised reforms in the health care sector, such as changing the bidding process for drugs and shortening the FDA approval process. It is yet to be seen how much headway it can actually make with these reforms.

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.

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

Short interest in Pfizer Inc. (NYSE: PFE) decreased to 48.51 million shares from the previous 52.19 million. The stock was last seen trading at $42.53, within a 52-week range of $33.20 to $42.79.

The number of Merck & Co. Inc. (NYSE: MRK) shares short fell to 19.91 million from 21.90 million in the previous period. Its shares were trading at $69.83, in a 52-week range of $52.83 to $70.59.

Bristol-Myers Squibb Co. (NYSE: BMY) short interest rose to 14.12 million shares from the previous reading of 13.37 million. Shares were last seen at $60.74, in a 52-week range of $49.96 to $70.05.

The number of shares short in AbbVie Inc. (NYSE: ABBV) decreased to 31.44 million from the previous 32.58 million. The stock was trading at $93.67, and its 52-week range is $83.19 to $125.86.

Eli Lilly and Co.’s (NYSE: LLY) short interest decreased to 12.64 million shares from the previous 14.20 million. The stock was trading at $106.21. The 52-week range is $73.69 to $107.84.

Teva Pharmaceutical Industries Ltd.’s (NYSE: TEVA) short interest rose to 38.79 million from the previous level of 36.07 million. Shares were trading at $22.48, in a 52-week range of $10.85 to $25.96.