3 Biotech Stocks Making Waves

Biotech stocks Osiris Therapeutics, Inc. (NASDAQ:OSIR), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), and Novocure Ltd (NASDAQ:NVCR) are on the move today

May 31, 2016 at 12:01 PM
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Biotech stocks are on the move today, with major M&A news and drug approval sparking some bold price action. Among the drugmakers shifting on the charts today are Osiris Therapeutics, Inc. (NASDAQ:OSIR), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), and Novocure Ltd (NASDAQ:NVCR).

  • OSIR is off 14.5% at $4.85, after the company disclosed in a regulatory filing that it is the subject of a criminal investigation by the U.S. Attorney's office. The drop brings OSIR's year-to-date loss to 53.3%. The shares were rejected by their 60-day moving average on Friday, which has been serving as resistance since September. Unsurprisingly, short interest on Osiris Therapeutics, Inc. is inflated, representing nearly 24% of the stock's total float. At the equity's average pace of trading, it would take more than five weeks to cover all these bearish bets.
  • NBIX has added 8.5% at $50.10, after sector peer Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) received a letter from the U.S. Food and Drug Administration (FDA) asking for more information about its treatment for Huntington's disease, and declining to approve the drug. Neurocrine Biosciences, Inc. is currently developing a rival treatment, which has been given a "Breakthrough Therapy" designation from the Food and Drug Administration (FDA). While the stock is still in the red for 2016, it has broken out above the $48-$49 level that had been causing trouble in recent months, putting it on track for its highest daily close since early January. Elsewhere, the portion of NBIX's float currently sold short represents eight sessions' worth of trading, at the stock's typical daily volume -- so short-covering activity is a distinct possibility. By contrast, the security can't expect much more help from the brokerage crowd, as every analyst providing coverage already calls NBIX a "strong buy."
  • NVCR received FDA approval to begin a Phase III trial of its radiosurgery cancer treatment. The news had the stock as much as 3.6% higher out of the gate, but the shares have since reversed course, last seen down 0.5% at $11.24. Longer term, Novocure Ltd has given up roughly half of its value on a year-to-date basis, but 60% of following analysts still maintain a "strong buy" rating on the stock. Meanwhile, short interest has been on the rise, and now accounts for 6.5% of NVCR's float, or more than six days of trading, at the stock's typical trading levels. Still, the shares could find support in the $10.80-$11 region, which has limited NVCR's pullbacks since the stock rallied from its record low in early February.
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