Drug Data Deals a Blow to Catabasis Pharmaceuticals Inc (CATB)

Catabasis Pharmaceuticals Inc (CATB) short sellers are celebrating the stock's 26% plunge

by Alex Eppstein

Published on Jun 8, 2016 at 2:07 PM
Updated on Jun 24, 2020 at 10:16 AM

Biotech Catabasis Pharmaceuticals Inc (NASDAQ:CATB) is getting crushed this afternoon, after the drugmaker's cholesterol drug failed in a mid-stage trial. At last check, the stock was down roughly 26% at $5.08, and earlier fell as far south as $4.78, putting CATB on track for its worst daily performance ever. This is business as usual for the shares, which have surrendered 36% of their value year-to-date.

CATB short sellers must be loving life right now. During the past two reporting periods, short interest on the stock spiked close to 15%. Now, 7.8% of CATB's float is sold short, which would take approximately four weeks to buy back, at the stock's typical trading levels. Of course, the shares are short-sale restricted today amid their steep sell-off.

On the other hand, it seems as though the brokerage crowd is beginning to sing a different tune. Heading into today, all three analysts tracking CATB had doled out "strong buy" recommendations. Plus, the stock's consensus 12-month price target stood at $21.50 -- record-high territory, and quadruple the shares' current perch.

Since the drug data was released, signs of pessimism have begun cropping up. Specifically, Catabasis Pharmaceuticals Inc (NASDAQ:CATB) has seen its price target cut at Wedbush (to $17), Citigroup (to $8), and Oppenheimer (to $23).

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

Access your FREE insider report before it's too late!


  
 
 

Partnercenter