Healthcare Stocks Put Skeptics on Notice

Among the healthcare stocks breaking out today are Clovis Oncology Inc (NASDAQ:CLVS), DexCom, Inc. (NASDAQ:DXCM), Sangamo Biosciences, Inc. (NASDAQ:SGMO), and ZIOPHARM Oncology Inc. (NASDAQ:ZIOP)

by Alex Eppstein

Published on Sep 10, 2015 at 3:17 PM
Updated on Sep 10, 2015 at 3:17 PM

A number of healthcare-related stocks are breaking out today -- some for clearer reasons than others. Four of the most impressive movers are Clovis Oncology Inc (NASDAQ:CLVS), DexCom, Inc. (NASDAQ:DXCM), Sangamo Biosciences, Inc. (NASDAQ:SGMO), and ZIOPHARM Oncology Inc. (NASDAQ:ZIOP).

CLVS is 9.1% higher at $104.83, and earlier tagged a record peak of $105.57, with some media outlets attributing the surge to well-received data presented at the World Conference on Lung Cancer. Over the past 52 weeks, the shares have almost doubled in value. Whatever the motive, shorts might be hitting the bricks. Over 15% of Clovis Oncology Inc's float is sold short, representing 8.5 days' worth of pent-up buying demand, at typical volumes.

Likewise, DXCM sports a 6.7% lead at $96.95 -- just a chip-shot away from its all-time high of $98.85 from mid-August. Helping the stock recently was a quick bounce off its ascending 50-day moving average. The surge may be giving option bears second thoughts. DexCom, Inc.'s 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio rests at an annual peak of 0.38.

SGMO has bounded almost 20% north this afternoon, after the company's ZFP Therapeutic Phase 1 study protocol received unanimous approval from the National Institute of Health's (NIH) Recombinant DNA Advisory Committee. Likewise, the drugmaker said it will initiate a Phase 1 clinical trial next year, pending FDA clearance.

Option bulls are likely jumping for joy at the massive bounce. Sangamo Biosciences, Inc.'s 50-day ISE/CBOE/PHLX call/put volume ratio of 27.27 sits a mere 2 percentage points from a 12-month high. On the flip side, short sellers are getting burned. Nearly 14% of SGMO's float is sold short, or over nine times the stock's average daily trading level.

Finally, ZIOP has jumped 4.7% to trade at $9.76, following a well-received presentation at the Wells Fargo Healthcare Conference this afternoon. Year-over-year, the shares have now more than tripled in value.

Short sellers and option traders alike probably find this a tough pill to swallow. ZIOPHARM Oncology Inc.'s short-interest ratio stands at a lofty 8.70, while its 10-day ISE/CBOE/PHLX put/call volume ratio of 0.49 outstrips 91% of comparable readings from the prior year.

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