Landmark FDA Approval Sparks Big Drug Stock Moves

GILD is fast approaching overbought status after a landmark FDA approval for Novartis

Aug 30, 2017 at 3:18 PM
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U.S. stocks are trading higher this afternoon, as the S&P 500 Index (SPX) heads toward its fourth straight win. Among the stocks in the spotlight today are chipmaker Himax Technologies, Inc. (NASDAQ:HIMX), healthcare solutions provider Novartis AG (NYSE:NVS), and biopharmaceutical company Gilead Sciences, Inc. (NASDAQ:GILD). Here's a quick look at what's moving shares of HIMX, NVS, and GILD.

Himax Teams With Qualcomm to Make 3-D Camera

Shares of Himax Technologies are up 6.3% to trade at $9.26, after the company announced its collaboration with Qualcomm (QCOM) to develop and commercialize a high resolution 3-D depth-sensing camera system, called SLiM. The two companies plan to launch mass production of the camera during the first quarter of 2018.

HIMX has climbed roughly 78% from its three-year low of $4.88 set on Feb. 10 to yesterday's close of $8.71. Now up 53.3% year-to-date, the chipmaker's stock is poised for a monthly close above its 20-month moving average for only the second time in 2017.

HIMX has consistently exceeded options traders' volatility expectations over the past year, as evidenced by the stock's Schaeffer's Volatility Scorecard (SVS) of 100. And yet near-term option traders continue to price in relatively low volatility expectations, as HIMX's Schaeffer's Volatility Index (SVI) stands at 48% -- lower than 91% of all other readings from the past year.

Novartis Scores First FDA Approval for Gene Therapy Drug

Novartis stock is down 1.1% to trade at $82.73, despite receiving approval for its CAR-T cell therapy cancer treatment from the Food and Drug Administration (FDA) -- making it the first gene therapy available in the U.S. The treatment, named Kymriah, is designed to use a patient's own T cells to fight acute lymphoblastic leukemia.

NVS is pulling back to test its 80-day moving average for the first time since April, but still boasts a roughly 12% year-to-date lead. Plus, five of the eight analysts following the stock rate it a "strong buy."

Gilead Sciences Stock Gains on Novartis FDA Nod

Boosted by the FDA's landmark approval of CAR-T therapy are shares of Gilead Sciences stock, last seen trading 6.6% higher at $80.73 -- nearing its 52-week high of $82.07, set on Sept. 20. This comes just days after Gilead announced its plan to buy Kite Pharma (KITE), another player in the CAR-T drug development space, for $11.9 billion.

After a few days of well-received news for the long-term underperformer, GILD is fast approaching overbought status. At last check, the equity's Relative Strength Index (RSI) was docked at 67.75.


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