Biotech Blowout: Flexion Therapeutics Inc, bluebird bio Inc, and Ocular Therapeutix Inc

Flexion Therapeutics Inc (NASDAQ:FLXN), bluebird bio Inc (NASDAQ:BLUE), and Ocular Therapeutix Inc (NASDAQ:OCUL) enjoyed outsized gains today

by Josh Selway

Published on Feb 17, 2016 at 4:51 PM
Updated on Jun 24, 2020 at 10:16 AM

Biotech stocks haven't been left out of Wall Street's recent success. In fact, the Nasdaq Biotechnology Index (NBI), an exchange-traded fund (ETF) that tracks biotechs' performance on the Nasdaq Composite (COMP), settled up 3% today - and notched its best three-day stretch since October. Among individual stocks, Flexion Therapeutics Inc (NASDAQ:FLXN)bluebird bio Inc (NASDAQ:BLUE), and Ocular Therapeutix Inc (NASDAQ:OCUL) all finished with notable gains today. Let's take a closer look at FLXN, BLUE, and OCUL. 

Just a few days after touching an all-time low of $10.46, FLXN scorched a 19.3% path to the upside to close at $13, after the company's pain drug Zilretta was successful in a late-stage study. However, shares of the biotech firm topped out just below their 20-day moving average, a previous level of support that has thwarted numerous breakout attempts in 2016.

Like another outperforming biotech stock, call buyers have recently taken a sudden interest in FLXN. Although volume is still relatively light, over the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), almost 46 calls have been bought to open for each put. However, since short interest on Flexion Therapeutics Inc accounts for a healthy 8.1% of its float, some of this call buying could be shorts hedging their positions

Elsewhere, BLUE added 8.2% today to close at $54.24, and is on pace to notch its first weekly close north of its 10-week moving average since early December. The shares gained ground on news the company will receive $10 million from Celgene Corporation (NASDAQ:CELG), after the latter agreed to exercise an option to exclusively license BLUE's Myeloma treatment, bb2121. BLUE also announced it has begun its Phase 1 study of the treatment.

On the Street, analysts certainly have high expectations for bluebird bio Inc. For one, 79% say the stock's a "strong buy," and none call it a "sell." What's more, BLUE's average 12-month price target comes in at $108.50 -- roughly double current levels. 

Lastly, OCUL was one of the best Nasdaq performers today, adding 38.5% to close at $8.67. The surge comes after the company revealed its Phase 3 study for its glaucoma drug candidate OTX-TP will begin in the third quarter. Despite this gap higher, the shares remain roughly 80% below their all-time high of $44.19 from March. Plus, OCUL failed to overtake its descending 100-day moving average -- a trendline that has ushered the stock lower since last April.

Amid the stock's technical decline, short sellers have stepped up. During the most recent two-week reporting period, short interest swelled by 10.5%, and now accounts for almost 15% of Ocular Therapeutix Inc's float. Going by typical trading volumes, it'd take bears close to nine days to buy back their bets. 

A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

Access your FREE insider report before it's too late!


  
 
 

Partnercenter