3 Biotech Stocks on the Move

ACADIA Pharmaceuticals Inc. (ACAD), Regeneron Pharmaceuticals Inc (REGN), and Natus Medical Inc (BABY) are making news and notable moves today

Apr 4, 2016 at 3:31 PM
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Biotech stocks are on the move today, with the SPDR S&P Biotech ETF (XBI) up 2.3% at $54.36. Below we'll take a look at three drugmakers with notable news and price action today: ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), Regeneron Pharmaceuticals Inc (NASDAQ:REGN), and Natus Medical Inc (NASDAQ:BABY).

  • ACAD is 6.4% higher at $30.49 after Baker Brothers upped its stake in the company to 21.8%, according to a recent filing. ACADIA Pharmaceuticals Inc. gained 41% last week, boosted by upbeat drug data and bullish analyst attention. But the shares are still down 14.5% year-to-date. While all seven brokerage firms following the stock call it a "strong buy," short interest still represents more than one-fifth of ACAD's available float. Option traders also have yet to show optimism. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.00 sits higher than 90% of the past year's readings.
  • Leerink raised its price target on REGN to $523 from $505, boosting the shares 0.7% to $408.21. Encouraging drug news helped Regeneron Pharmaceuticals Inc add about 12.4% on Friday, and sent call buyers into a frenzy. But the stock is still down about 25% in 2016, and more than half of analysts give REGN a "hold" or "strong sell" rating. Still, option traders seem to be eyeing more upside. The equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.12 is in the top percentile of its annual range, and traders are still busy buying to open calls today. In fact, these bullish bets are trading at 1.5 times their typical intraday rate, doubling puts, with short-term speculators initiating long positions at the weekly 4/8 420-strike call.
  • BABY lowered its revenue outlook for the first quarter, sending the shares reeling 20.5% to trade at $31.52 -- within striking distance of its annual low of $29.34, seen in late August. Today's drop represents the stock's worst single-day plunge in seven years, and brings Natus Medical Inc's year-to-date loss to 34.4%, which could inspire a swing in sentiment among the brokerage crowd. All three analysts providing coverage currently rate BABY a "buy" or better. Meanwhile, short interest has been on the rise -- up 37% during the most recent two-week reporting period. But as BABY is firmly on the short-sale restricted list today, traders have been taking to the options pits, where contracts are crossing at eight times the typical intraday rate. While absolute option volume is still quite low, puts more than double calls, with some buy-to-open action spotted at the April 30 put -- today's most active strike by a mile.

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