Short Sellers Return to Biotech Stocks

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24/7 Wall St. has tracked the short interest in leading biotech and emerging pharmaceutical stocks. After largely shying away in the previous period, short sellers returned to many of these stocks in early February. The largest upswings happened to BioMarin Pharmaceutical, which received FDA approval for its Vimizim, and Amgen, which announced a successful phase III trial of is cholesterol-fighting drug, during the period.

Amgen Inc. (NASDAQ: AMGN) saw a 10.1% increase in early February to 10.72 million shares, or 1.4% of the total float. That was the highest level of short interest since March of last year. And the days to cover returned to more than three.

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) saw the biggest gain in short interest among those biotech companies featured here, 46.3%, to around 6.30 million shares. That was the greatest number of shares short since last March, and it was 4.5% of the total float. The days to cover remained less than five.

Biogen Idec Inc. (NASDAQ: BIIB) saw a 9.2% rise in its short interest to more than 2.85 million shares by mid-month. That reclaimed most of the decline in the previous period, and it was 1.5% of the company’s total available shares. It would take less than two days to close out all short positions.

Celgene Corp. (NASDAQ: CELG) saw its short interest grow by 6.2% to more than 4.96 million shares, or 1.2% of Celgene’s float. Note that the short interest has been rising since the end of December. But it would take less than two days to cover all short positions.

Dendreon Corp. (NASDAQ: DNDN) saw its short interest shrink to 44.94 million shares from the 45.02 million at the end of January. The number of shares sold short has dwindled for eight straight periods to the lowest level in at least a year, but it still represents 29.8% of the float. The days to cover jumped from about 10 to more than 21.

Gilead Sciences Inc. (NASDAQ: GILD) had a 2.2% rise to 87.25 million shares short. That was the highest level of short interest in the past year, after rising in nine of the past 10 periods, and it totaled 5.7% of the float. The days to cover was more than six.

Other biotech companies that saw an increase in their short interest between the January 31 and February 14 settlement dates include Alexion Pharmaceuticals, Illumina, Regeneron Pharmaceuticals and Seattle Genetics. Shares sold short in Medivation, Questcor Pharmaceuticals and Vertex Pharmaceuticals declined somewhat during the period.