2 Biotech Stocks Struggling Today

INSY stock is pacing for its eighth straight loss

by Patrick Martin

Published on Mar 19, 2018 at 10:11 AM
Updated on Jun 24, 2020 at 10:16 AM

Cidara Therapeutics Inc (NASDAQ:CDTX) stock is lower today, down 22% to trade at $6.09, despite the biotech company reporting its anti-fungal drug Rezafungin acetate met the main goals of a mid-stage study. Cidara will advance this drug to late-stage trials in the latter half of the year. Even amidst the seemingly upbeat news -- and despite being up more than 20% ahead of the bell -- CDTX stock is now on track for its worst single-day performance since February 2017, and is within a stone's throw from its Aug. 16 record low of $5.60. 

Analysts are firmly on the bullish bandwagon. Of the six brokerages covering CDTX, five rate it a "strong buy." Furthermore, the equity's average 12-month price target of $14.19 represents a 133% premium to its current perch. Continued technical underperformance could prompt analyst downgrades and price-target cuts. 

In addition, Insys Therapeutics Inc (NASDAQ:INSY) stock is also staring at a deficit this morning, down 1.2% to trade at $6.36. The company issued a statement regarding Friday's federal indictment of five New York doctors charged with taking kickbacks from Insys in exchange for prescribing fentanyl-based Subsys. Insys said it will cooperate with authorities to resolve the issues of "inappropriate actions" by the former employees.

INSY shares have shed 34% in 2018 alone, and have been guided lower by their descending 20-day moving average since late January. The equity is currently on track for an eight-day losing streak, and last Friday locked up its worst weekly performance since Jan. 12, and its first three-week losing streak since August. 

It's no surprise, then, that the drug stock is heavily shorted. Short interest increased by 25% since early December, and the 12.18 million shares sold short represents a whopping 65% of INSY's total available float. 


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