The Biotech Stock Soaring on Drug Study Plans

Plus, RIG is on pace to snap an eight-day winning streak

Sep 21, 2017 at 3:15 PM
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U.S. stocks are trading lower this afternoon, with the Dow at risk of snapping its nine-session winning streak. Among the names in the spotlight today are biopharmaceutical company Akari Therapeutics PLC (NASDAQ:AKTX), oil concern Transocean LTD (NYSE:RIG), and steel stock AK Steel Holding Corporation (NYSE:AKS). Here's a quick look at what is moving shares of AKTX, RIG, and AKS.

Akari Therapeutics Stock Skyrockets on Drug Study Plans

Akari Therapeutics stock has exploded today, last seen up 72.6% to trade at $9.61, after the company said it plans to launch two late-stage studies of its rare blood disorder drug, Coversin, following a meeting with the U.S. Food and Drug Administration (FDA). Today's jump ranks AKTX the top stock on the Nasdaq today, and earlier sent the shares to an intraday peak of $11.95 -- more than double yesterday's close, and in territory AKTX hasn't visited since May. AKTX now boasts a 39% year-to-date lead, and is pacing for its first close above its 200-day moving average in four months, before the stock's CEO-related bear gap. If the stock's rally continues, AKTX could garner bullish notes in the near term, as the two analysts following the stock still rate it a lukewarm "hold."

RIG Sinks on Early Contract Cancellation News

Swimming in the red today are shares of Transocean stock, last seen trading 8.6% lower at $8.93, after a subsidiary of Chevron terminated its contract with Transocean over its drillship earlier than expected. The cancellation, which is effective in November, will grant Transocean $148 million in contract termination fees. RIG stock, however, is now down 39% year-to-date. Today's plunge should break the oil stock's eight-day winning streak, and ranks RIG as the worst performer on the New York Stock Exchange (NYSE).

Shorts are likely cheering today's decline, as short interest on RIG has grown 23.4% during the past two reporting periods, and now accounts for a fifth of the stock's total available float. At the equity's average daily trading volume, it would take more than a week to cover all the shorted shares.

AK Steel Stock Slips on Output Data

Also trading lower today is AK Steel stock, last seen down 2.4% at $5.50, after the World Steel Association reported a 6.3% rise in global crude steel production last month. This is more of the same for AKS stock, which has lost roughly 46% of its value since the start of the year, pressured by its 10-week and 20-week moving averages.

Despite its performance, options traders on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have certainly upped the bullish ante of late. AKS sports a 10-day call/put volume ratio of 16.04 -- just 7 percentage points from an annual high. In other words, traders have bought to open 16 AKS calls for every AKS put in the past two weeks.


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