Major Pharma Sees a Few Wild Swings in Short Interest

Health and Healthcare

Published: March 27, 2019 8:50 am

Last Updated: January 30, 2020 10:48 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 actually can 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 March 15 short interest data have been compared with the previous figures, and short interest in most of these selected pharmaceutical stocks decreased, with two major movers in the group.

Short interest in Pfizer Inc. (NYSE: PFE) decreased handily to 103.49 million shares from the previous 138.18 million. The stock was trading at $42.42 Wednesday morning, within a 52-week range of $34.37 to $46.47.

The number of Merck & Co. Inc. (NYSE: MRK) shares short fell to 38.68 million from 39.66 million in the previous period. Its shares were trading at $82.92, in a 52-week range of $52.83 to $83.47.

Bristol-Myers Squibb Co. (NYSE: BMY) short interest fell to 65.78 million shares from the previous reading of 74.11 million. Shares traded at $48.34, in a 52-week trading range of $44.30 to $63.75.

The number of shares short in AbbVie Inc. (NYSE: ABBV) increased to 22.78 million from the previous 21.88 million. The stock was trading at $80.76, and its 52-week range is $75.77 to $107.25.

Eli Lilly and Co.’s (NYSE: LLY) short interest increased sharply to 133.36 million shares from the previous 103.66 million. The stock was trading at $131.02. The 52-week range is $75.40 to $132.13.

Teva Pharmaceutical Industries Ltd.’s (NYSE: TEVA) short interest decreased to 20.30 million from the previous level of 20.67 million. Shares were trading at $15.93, in a 52-week range of $14.59 to $25.96.