Biotechs Vitae Pharmaceuticals Inc (VTAE) and Intrexon Corp (XON) are shooting higher, and short sellers can't be happy
As the broader market
searches for direction, biotechs
Vitae Pharmaceuticals Inc (NASDAQ:VTAE) and
Intrexon Corp (NYSE:XON) are taking off. For both stocks, this likely means one group of traders, short sellers, are having a rough day.
Starting with
VTAE, the shares were last seen 3.4% higher at $13.41. The stock is getting a lift on
encouraging top-line results from the company's autoimmune drug candidate, VTP-43742. However, it's not unusual to
see the shares outperforming. VTAE has bested the S&P 500 Index (SPX) by almost 57 percentage points in the past three months.
This isn't good news for
short sellers. During the last two reporting periods, short interest on Vitae Pharmaceuticals Inc shot 12.2% higher. Currently, more than one-fifth of the equity's float is controlled by short sellers, representing over two week's worth of buying power, at normal daily volumes. With this kind of sideline cash available, it's possible for the shares to benefit from a short-squeeze situation.
Meanwhile,
XON has picked up 7% to hit $37.75, after the Food and Drug Administration (FDA) gave a thumbs up to a subsidiary's
genetically altered salmon product, AquAdvantage Salmon -- designating it as safe for human consumption. The security certainly needed a pick-me-up; it's dropped almost 46% since hitting an all-time high of $69.45 back in early August.
Short sellers are
hoping these gains are short lived. Close to 15 million Intrexon Corp shares are sold short -- or more than half of the equity's float. At normal daily volumes, it would take shorts almost two weeks to repurchase their bets.