Two Healthcare Stocks Moving In Opposite Directions

CERS stock is on track for its best day since May

Managing Editor
Jan 24, 2018 at 9:55 AM
facebook twitter linkedin

Two healthcare stocks are making noise this morning, for different reasons. Biotech Puma Biotechnology Inc (NASDAQ:PBYI) reported a setback with its cancer drug in Europe, while blood transfusion specialist Cerus Corporation (NASDAQ:CERS) scored a big win with a late-stage study. Below is a quick look at shares of PBYI and CERS.

Puma Biotechnology Hit With Downgrade Amid Europe Concerns

Puma Biotechnology is down 26.8% to trade at $66.55 this morning, on track for its worst single-day session in over two years and landing on the short-sale restricted list, after the company indicated a European regulatory panel was unlikely to give the company's breast cancer drug, Neratinib, a positive recommendation. As a result, Cowen and Company downgraded the drug stock to "market perform" from "outperform," while also issuing a price-target cut to $68 from $123. Leerink, RBC, and Credit Suisse all significantly lowered their price targets, as well.

The news today has PBYI stock trading below its 200-day moving average for the first time since May, and short sellers are likely cheering today's collapse. The 2.67 million shares sold short represents a healthy 11% of PBYI's total available float, and nearly five days' worth of pent-up buying power. 

Cerus Stock Soars After Upbeat Study

Cerus Corporation announced its late-stage red blood cell transfusion study for thalessemia patients met its main efficacy and safety goals. At last check, CERS stock is up 17.3% to trade at $5.08, earlier touching an annual high of $5.24. The equity has been on fire lately, with strong support from the 50-day moving average helping it more than double in value over the past six months.

A short squeeze could provide more fuel for the equity. Although short interest fell 4% during the last two recent reporting periods, it still represents more than 9% of CERS' total available float. At the security's average pace of trading, it would take about 14 sessions for the remaining pessimistic positions to be repurchased.



Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners