2 Drugmakers Making Sharp Moves

Kite Pharma Inc (KITE) and Raptor Pharmaceutical Corp. (RPTP) both revealed encouraging news this morning

by Alex Eppstein

Published on Aug 17, 2015 at 10:33 AM
Updated on Jun 24, 2020 at 10:16 AM

A number of biopharmaceutical firms are making headlines this morning, following upbeat drug news. Specifically, Kite Pharma Inc (NASDAQ:KITE) said its cancer drug, KTE-C19, is on track to start a late-stage trial, and Raptor Pharmaceutical Corp. (NASDAQ:RPTP) received FDA approval to expand its label for Procysbi(R) -- a nephropathic cystinosis treatment -- to include children aged 2-to-6 years.

Of the two, though, only KITE is higher this morning. Specifically, the shares have tacked on 4.6% at $60.65, overcoming broad-market headwinds. The development is a welcome one for investors, who watched the stock get burned last week on poorly received earnings.

One group that may be feeling the heat is short sellers. Almost 15% of Kite Pharma Inc's float is sold short, equivalent to about nine days of trading, at typical volumes. However, the brokerage bunch isn't being caught off-guard, as 100% of analysts have doled out "strong buy" recommendations on the stock.

Meanwhile, after jumping out of the gate and approaching its 80-day moving average, RPTP reversed low, and was last seen down 1.7% at $13.01. Longer term, though, the shares have advanced nearly 24% in 2015, and could find a foothold at their underfoot 100-day trendline -- from which they bounced less than two weeks ago.

Option traders have been extremely bullish toward Raptor Pharmaceutical Corp. in recent weeks. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 2,077 calls, compared to just six puts.

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