Buzz Stocks: Intercept Pharmaceuticals Inc, Anavex Life Sciences Corp, and Depomed Inc

Today's stocks to watch in the news include Intercept Pharmaceuticals Inc (NASDAQ:ICPT), Anavex Life Sciences Corp (NASDAQ:AVXL), and Depomed Inc (NASDAQ:DEPO)

Apr 8, 2016 at 10:01 AM
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Stocks are signaling a positive start this morning, as oil prices bounce on supportive comments from Fed Chair Janet Yellen. Meanwhile, pharmaceutical stocks are in focus today, with Intercept Pharmaceuticals Inc (NASDAQ:ICPT), Anavex Life Sciences Corp (NASDAQ:AVXL), and Depomed Inc (NASDAQ:DEPO) all in the news.

  • Just days after the Food and Drug Administration (FDA) waxed optimistic on ICPT's cirrhosis treatment, an FDA panel unanimously voted in support of accelerated approval of the drug, obeticholic acid (OCA). Nevertheless, a bearish brokerage note from Morgan Stanley -- which lowered its rating on ICPT to "underweight" from "equal weight" and its price target to $80 from $100 -- has sent the shares of Intercept Pharmaceuticals Inc 5% lower to $155.74, paring their week-to-date advance to 19%. Short sellers are likely cheering today's reversal, considering 22% of ICPT's float is sold short, or 7.8 times the stock's average daily volume.

  • The FDA also weighed in on AVXL, granting orphan status to its frontotemporal dementia (FTD) drug -- sending the shares up 11.3% out of the gate to $5.92, and on track for their first close north of their 120-day moving average since Jan. 4. Longer term, AVXL is off 60% from its Nov. 3 four-year high of $14.84, and short sellers have been ramping up their bearish exposure. In fact, short interest is up nearly 43% from the Nov. 15 report, and now accounts for a healthy 10.1% of Anavex Life Sciences Corp's available float.

  • Starboard Value LP is attempting to pull a Yahoo! Inc. (NASDAQ:YHOO) on DEPO, with the activist hedge fund unveiling a 6.8% stake in the company and revealing plans to make six board nominations. Starboard said it is concerned over a "series of shareholder-unfriendly steps" taken by DEPO, including last year's rejection of Horizon Pharma PLC's (NASDAQ:HZNP) hostile-takeover attempt. Shares of DEPO have surged 15.7% out of the gate to $17.35 -- and north of their 30-week moving average in intraday action for the first time since mid-September. Today's bull gap may have short sellers on edge. Short interest on Depomed Inc surged 12.2% in the last two reporting periods, and now accounts for more than 23% of the stock's available float.
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