2 Drug Stocks Gapping Lower Today

Apple may be dropping Qualcomm for Intel

by Patrick Martin

Published on Feb 5, 2018 at 2:33 PM
Updated on Feb 5, 2018 at 2:37 PM

U.S. stocks continue to sink, mired in their worst sell-off in over a year. Among the stocks making notable moves today are chip stock Intel Corporation (NASDAQ:INTC), as well as biotech stocks Prothena Corporation (NASDAQ:PRTA) and Corcept Therapeutics Incorporated (NASDAQ:CORT). Here's a closer look at what's moving shares of INTC, PRTA, and CORT today.

Apple Hopes Bolster INTC Stock

Intel stock is up 1.4% at $46.77, at last check -- among the few Dow stocks higher in afternoon trading -- lifted amid rumors Apple (AAPL) might dropping its chip supplier Qualcomm (QCOM) in favor of Intel. The speculation has INTC stock on track to snap a five-day losing streak. The security broke past the $50 mark last Friday for the first time since 2000, thanks to a well-received earnings report, and ultimately peaked at $50.85 on Monday. Since then, however, Intel shares have suffered with the broader equities market.

In the options pits, calls continue to be popular. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), INTC's 10-day call/put volume ratio sits at 2.86. Not only does this show that calls have outnumbered puts by a nearly 3-to-1 ratio, but this ratio ranks in the 70th percentile of its annual range. This indicates that traders have bought to open Intel calls over puts at a faster-than-usual clip lately.

Chief Medical Officer Departure Guts PRTA Stock

Late Friday, Prothena announced the resignation of its chief medical officer. The news has sent PRTA stock reeling, down 23% to trade at $30.39 -- and just off a nearly two-year low of $29.83. The biotech stock has now shed 56% since its September high of $70, and is currently short-sale restricted.

Analysts may be re-thinking their bullish stance on the equity, which is among the worst of the Nasdaq today. Of the nine brokerages covering PRTA, eight rate the shares a "buy" or "strong buy." Furthermore, PRTA's average 12-month price-target sits at $75.64, about a 150% premium from the stock's current perch. This indicates the biotech stock could be susceptible to downgrades and/or price-target cuts in the future. 

TEVA's NDA Letter Sends CORT Stock Spiraling

Shares of CORT are down a whopping 25% at $17.50, and are the worst of the Nasdaq so far, after Teva Pharmaceutical (TEVA) filed an abbreviated new drug application (NDA) for a generic version of Corcept's hyperglycemia treatment, Korlym. The news has CORT stock, which is currently short-sale restricted, testing its 160-day moving average for the second time since December. Nevertheless, CORT stock has added nearly 120% in the past 52-weeks, and touched a record high of $25.96 on Jan. 29.  

Although CORT stock is short-sale restricted, plenty of short sellers are likely cheering today's collapse. Short interest increased by 75% during the last two reporting periods, and has more than doubled since early November. These bearish bets now represent 18% of CORT's total available float.

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