Stocks On the Move: Incyte Corporation, Merrimack Pharmaceuticals Inc, and Surgical Care Affiliates Inc

INCY, MACK, and SCAI are among the stocks on the move today

by Alex Eppstein

Published on Jan 9, 2017 at 12:06 PM

U.S. stocks are generally having a sluggish start to the week, though tech's outperformance has lifted the Nasdaq to a record high. Among specific equities in focus today are drug stocks Incyte Corporation (NASDAQ:INCY) and Merrimack Pharmaceuticals Inc (NASDAQ:MACK), as well as hospital operator Surgical Care Affiliates Inc (NASDAQ:SCAI). Here's a quick look at what's moving INCY, MACK, and SCAI.

  • INCY has jumped 6.6% to trade at $115.49, and earlier touched an annual high of $116.89, after the drugmaker's "highly positive update" regarding a combination cancer treatment. Specifically, the company, along with partner Merck & Co., Inc. (NYSE:MRK), have decided to advance a joint clinical development program of epacadostat and Keytruda. Bearish options traders could be kicking rocks as a result. Incyte Corporation has amassed a put/call volume ratio of 4.13 during the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- just 4 percentage points from a 12-month peak.
  • MACK has bounded 8.5% higher at $3.91, after drugmaker Ipsen SA bought the former's pancreatic cancer treatment Onivyde for $1 billion. The gains come in spite of a price-target cut to $5 from $7 at Baird, yet they're not enough to put Merrimack Pharmaceuticals Inc back into positive year-to-date territory. Short sellers have been piling on the stock for a while. By the numbers, nearly 31% of MACK's float is dedicated to short interest, which -- at the stock's average daily volumes -- would take 18 sessions to buy back. Suffice it to say, these bears may be sitting on pins and needles, waiting to see whether today's breakout is an anomaly or the start of an uptrend.
  • SCAI is another huge winner, up nearly 16% at $56.48, and fresh off a record high of $56.79. Driving the shares upward is news that UnitedHealth Group Inc's (NYSE:UNH) Optum unit will buy Surgical Care Affiliates Inc for $2.3 billion. Suffice it to say, short sellers -- of which there are many -- are getting burned. Specifically, over 7% of SCAI's float is sold short, which would take almost two weeks to cover, at the stock's average daily trading pace.
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