The Drug Stock That Doubled on Upbeat Data

SAGE Therapeutics is in rally mode after upbeat data on the postpartum depression drug Brexanolone

Managing Editor
Nov 9, 2017 at 10:29 AM
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U.S. stocks are trading lower this morning, pressured by the prospect of a delay in Republican tax reform. Among the stocks making moves today are discount retailer Kohl's Corporation (NYSE:KSS), biopharmaceutical company SAGE Therapeutics Inc (NASDAQ:SAGE), and drug concern Otonomy Inc (NASDAQ:OTIC). Here's a closer look at what's moving shares of KSS, SAGE, and OTIC.

Kohl's Falls on Earnings Miss

Shares of Kohl's gapped lower after the company missed third-quarter earnings estimates. The stock is down 6.5% at $38.14, and at risk of closing below its 200-day moving average for the first time since Sept. 5. KSS is now down nearly 23% on the year.

The security's Schaeffer's put/call open interest ratio (SOIR) of 1.24 ranks in the 80th percentile of its annual range, suggesting that in the options pits, short-term puts are more popular than calls. Short sellers are also targeting Kohl's; despite a 3.6% drop in the most recent reporting period, short interest still accounts for a steep 21% of the stock's float.

SAGE Therapeutics Rallies on Successful Drug Data

SAGE Therapeutics stock has gapped back above previous support at its 80-day moving average -- for the first time since its early September bear gap -- after announcing that its postpartum depression drug, Brexanolone, achieved the primary endpoint of two late-stage studies. SAGE is up 53.1% at $95.93 at last check, and earlier hit a new record high of $96.99.

Analysts are optimistic towards SAGE, with 12 of 14 carrying "buy" or "strong buy" ratings. On the other hand, short interest represents nearly 10% of the stock's total available float. At SAGE's average daily trading volume, it would take eight days for the shorts to cover all of these bearish bets.

Otonomy Briefly Doubles After Upbeat Drug News

Otonomy stock more than doubled in value earlier today, after the company reported late Wednesday that its meniere's disease drug met the main goal of a late-stage trial. Also last night, the drug company announced a third-quarter net loss of 69 cents per share. OTIC is up 94.6% at $5.45 at last check, after peaking earlier at $5.80 -- a gain of 107% from yesterday's close.

Most analysts expect the stock to keep surging. While the average 12-month price target of $10.67 is down sharply from the Aug. 9 mean of $35.40, it still implies expected upside of 84% from today's session high.


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