3 Drugmakers Swinging Wildly with the Market

Trading on Intrexon Corp (XON), RXi Pharmaceuticals Corp (RXII), and Prima Biomed Ltd. (PBMD) has been anything but boring

Oct 14, 2015 at 11:06 AM
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Biotech stocks started hot out of the gate, with the iShares NASDAQ Biotechnology Index ETF (NASDAQ:IBB) up as much as 2.9% -- and creeping into positive year-to-date territory. At last check, IBB has pared the majority of its earlier gains, thanks to broad-market headwinds. Nonetheless, here's a closer look at three drugmakers making moves this morning.

Intrexon Corp (NYSE:XON) shot as much as 11% higher earlier, but was last seen up 3.7% at $33.25. The move follows a rather tepid note from BofA-Merrill Lynch, which initiated coverage with a "neutral" rating and a $35 price target. Despite being up 76% year-over-year, the technical outperformer has recently struggled to break north of its descending 20-day moving average.

That hasn't stopped traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) from betting bullishly on XON. In fact, the equity's 10-day call/put volume ratio sits at a top-heavy 20.03 -- with 20 calls bought to open for each put. What's more, this ratio ranks in the 84th percentile of its annual range. Echoing this, XON's Schaeffer's put/call open interest ratio (SOIR) of 0.31 is lower than 99% of comparable readings taken in the previous 12 months.

RXi Pharmaceuticals Corp (NASDAQ:RXII) popped 8.3% earlier, but has reversed sharply lower to trade at $0.58 -- down 3.4%. As such, the stock is sitting in a roughly 64% year-to-date hole. Not surprisingly, the technical laggard has been plagued by short sellers. During the latest reporting period, short interest on RXII spiked 15%, and now represents 11.8% of its float -- or more than a week's worth of trading, at typical volumes. Further reflecting the Street's negative stance toward the equity, its SOIR of 0.27 rests a mere 8 percentage points from a 52-week high.

After being initiated with a "buy" rating and a $3 price target at H.C. Wainwright, Prima Biomed Ltd. (NASDAQ:PBMD) is up 0.8% at $1.23. Specifically, the brokerage cited the drugmaker's "potential to be the first to bring a new class of immunotherapies to market." Today's advance is just more of the same for a stock that's tacked on 84% in 2015.

Short interest, meanwhile, has been ramping up on PBMD -- growing over 26% during the last two reporting periods. However, at the security's typical daily volume, it would take just over one session to repurchase these positions.
 

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