Short Sellers Shy Away From Biotechs

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24/7 Wall St. has tracked the short interest in leading biotech and emerging pharmaceutical stocks. By and large, short sellers shied away from these stocks in late January. The largest downswings happened to Incyte, which named a new CEO in January, and Pharmacyclics, shares of which reached a new 52-week high during the period. Those that did see growth in the number of shares short in the period saw only modest gains.

Amgen Inc. (NASDAQ: AMGN) saw a 7.9% decline in its short interest in all of January to 9.74 million shares, or 1.3% of the total float. That is well down from the 17.17 million shares short in mid-February of last year. And the days to cover was a little more than three, the lowest it has been since last March.

Celgene Corp. (NASDAQ: CELG) saw its short interest grow by 2.2% to more than 4.67 million shares, or 1.1% of Celgene’s float. The 52-week peak in short interest of 6.42 million shares happened last March. It would take less than two days to cover all short positions.

Dendreon Corp. (NASDAQ: DNDN) saw its short interest shrink to 45.02 million shares from the 45.94 million in the middle of the month. The number of shares sold short has dwindled for seven straight periods to the lowest level in at least a year, but it still represents 29.8% of the float. The days to cover rose from about eight to near 10.

Gilead Sciences Inc. (NASDAQ: GILD) had a 2.0% rise to 85.41 million shares short. That was the highest level of short interest in the past year, after rising in eight of the past nine periods, and it totaled 5.6% of the total float. The days to cover fell from more than nine to less than seven.

Incyte Corp. (NASDAQ: INCY) saw a double-digit percentage drop in its short interest, falling to 6.18 million shares by the end of January. This was the fifth consecutive period of decline in the number of shares sold short, and it was 3.9% of Incyte’s float. The days to cover was about four.

Pharmacyclics Inc. (NASDAQ: PCYC) saw the biggest drop in short interest among those biotech companies featured here, 15.4%, to almost 1.39 million shares. That is 2.3% of the company’s float. It would take more than a day to close out all short positions.

Other biotech companies that saw a decline in their short interest between the January 15 and January 31 settlement dates include Alexion Pharmaceuticals, Biogen Idec, Medivation, Questcor Pharmaceuticals, Regeneron Pharmaceuticals and Vertex Pharmaceuticals. However, the short interest in BioMarin Pharmaceutical, Illumina and Seattle Genetics grew somewhat during the period.

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