Health and Healthcare

Short Sellers Increase Bets Against Major Pharmaceutical Stocks

Chris Lange

Published: June 27, 2016 8:11 am

Last Updated: January 13, 2020 6:21 am

The short interest data have been released for the June 15 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.

The June 15 short interest data have been compared with the previous figures, and for the selected pharmaceutical stocks short interest was increased.

As a reminder, 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 only slightly to 55.94 million shares from the previous 55.61 million. Shares of Pfizer closed Friday at $33.97, within a 52-week trading range of $28.25 to $36.46.

Merck & Co. Inc. (NYSE: MRK) had an increase in short interest to 30.99 million shares from 29.56 million in the previous period. Merck shares closed Friday at $55.88, in a 52-week range of $45.69 to $60.07.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) short interest decreased to 24.11 million shares. The previous level was 26.85 million. Shares of Teva closed Friday at $50.01, in a 52-week range of $49.51 to $72.31. Teva remains in the 24/7 Wall St. 10 stocks to own for the decade. Drug prices may be under pressure due to the campaign trail and under scrutiny, but if generic drugs are going to keep increasing in market share of existing drugs then there would seem to be a reason for owning Teva.

Bristol-Myers Squibb Co. (NYSE: BMY) saw its short interest increase to 17.50 million shares from the previous reading of 16.42 million. Shares closed Friday at $70.61, within a 52-week range of $51.82 to $75.12.

AbbVie Inc. (NYSE: ABBV) short interest jumped to 78.21 million shares, compared to the previous level of 26.53 million. Shares of AbbVie closed Friday at $59.86, in a 52-week trading range of $45.45 to $71.60.