2 Drug Stocks Moving Big on Trial Data

Bollywood stock EROS soars amid reports of FAANG interest in its library

Aug 7, 2017 at 10:54 AM
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The Dow hit another record out of the gate this morning, but U.S. stocks have since backpedaled to hover just north of breakeven. Mumbai-based film entertainment company Eros International plc (NYSE:EROS), drug concern Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE), and biopharmaceutical company Myokardia Inc (NASDAQ:MYOK) are three stocks in the news this morning. Here's a quick look at what's moving shares of EROS, ZYNE, and MYOK.

EROS Rallies on Rumors of $1 Billion FAANG Deal

Eros International is said to be in talks with Apple, Amazon, and Netflix to stream its massive library of Bollywood titles, according to Reuters, though none of the companies involved have yet confirmed the speculation. EROS stock is trading up 22.6% at $10.05, up from last Friday's freshly tapped 52-week low of $8.05 -- though the positive momentum has so far been capped by the equity's overhead 10-day moving average.

With the rumored sale of its library said to be valued around $1 billion, EROS seems to be benefiting from a short squeeze in today's trading. Short interest accounts for 28.7% of the stock's float, which represents 44 times the stock's average daily trading volume.

ZYNE Stock Craters as Cannabis Drug Disappoints

Zynerba Pharmaceuticals is taking a hit after its cannabis-based gel failed to meet the goal of a mid-stage trial for epilepsy treatment, with the stock down 57.6% at $6.38. Earlier, ZYNE hit a new 52-week low of $5.93. It's been a wild start to August for the drug company, which last week reported wider-than-forecast quarterly loss.

Options traders appeared to be bracing for some significant downside for ZYNE. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.27 ranks in the 96th percentile of its annual range. This suggests short-term options players have rarely been more put-heavy on ZYNE during the past 12 months.

Myokardia Rallies to New Record High

Despite reporting a wider-than-forecast second-quarter loss, MYOK stock was last seen up 81.3% to trade at $31.10. Traders are cheering robust trial results for the drug company's hypertrophic cardiomyopathy treatment, which met the primary goal of a mid-stage study. Earlier in the session, in fact, MYOK tagged a new record high of $31.70.

MYOK short interest rose by a net 4.3% during the past two reporting periods, and now accounts for roughly 6% of the stock's total available float. With a short interest ratio of about five days to cover, it's likely that some of today's gains have been sparked by a sudden change of heart among the shorts.

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