Major Pharma Short Interest Slides

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The short interest data have been released for the July 29 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 may be under pressure due to the campaign rhetoric 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 major pharmaceuticals.

The July 29 short interest data have been compared with the previous figures, and for most of the selected pharmaceutical stocks, short interest was down.

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 slightly to 47.81 million shares from the previous 47.67 million. Shares of Pfizer closed Tuesday at $35.08, within a 52-week trading range of $28.25 to $37.19.

Merck & Co. Inc. (NYSE: MRK) had a fall in short interest to 28.37 million shares, from 32.06 million in the previous period. Its shares closed Tuesday at $62.49, in a 52-week range of $45.69 to $64.00.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) short interest decreased to 20.81 million shares. The previous level was 22.34 million. Shares closed Tuesday at $53.45, in a 52-week range of $48.01 to $70.09.

Bristol-Myers Squibb Co. (NYSE: BMY) saw its short interest decrease to 14.06 million shares from the previous reading of 17.42 million. Shares closed Tuesday at $61.61, within a 52-week range of $51.82 to $77.12.

AbbVie Inc. (NYSE: ABBV) short interest fell to 50.88 million shares, compared to the previous 60.57 million. Shares of AbbVie closed Tuesday at $66.76, in a 52-week trading range of $45.45 to $69.82.