FDA Nod Ignites Intercept Pharmaceuticals Inc (ICPT)

Intercept Pharmaceuticals Inc (ICPT) has shot into positive year-to-date territory, after the FDA responded well to the company's kidney drug

by Alex Eppstein

Published on Apr 5, 2016 at 10:42 AM
Updated on Jun 24, 2020 at 10:16 AM

Shares of Intercept Pharmaceuticals Inc (NASDAQ:ICPT) are blowing up, after the drugmaker's cirrhosis treatment received a bullish nod from the Food and Drug Administration (FDA). At last check, the stock was up 18.3% at $157.97, sending its options pits into overdrive.

Specifically, intraday options volume on ICPT is running at six times the usual level. By the numbers, almost 2,500 calls are on the tape versus 850 puts. This call-skew is unusual, given longer-term data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, traders have bought to open 2.7 puts for every calls during the past two weeks, and resultant put/call volume ratio ranks in the 99th annual percentile.

Echoing this put bias is ICPT's Schaeffer's put/call open interest ratio (SOIR) of 1.23. Not only does this reading display an absolute preference for puts over calls among short-term options traders, it also outstrips 86% of comparable metrics taken in the past year.

Elsewhere, short sellers have been piling on ICPT. A lofty 22.3% of the stock's float is sold short, which would take nearly eight sessions to cover, at its average daily trading volumes. Meanwhile, analysts are evenly divided -- with five currently sporting "strong buy" ratings, against another five that have handed out "hold" or worse assessments.

Suffice it to say, the bears on Wall Street may be on edge, given Intercept Pharmaceuticals Inc's (NASDAQ:ICPT) intraday gains -- which has it back in the black for 2016. However, it's easy to understand the skepticism when looking at the stock's long-term underperformance. Year-over-year, ICPT has plunged more than 42%.

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