Inovio Pharmaceuticals is teaming up with CEPI
Two biotech stocks are making big moves higher this morning, defying the broad-market headwinds related to geopolitical tensions in Syria. Inovio Pharmaceuticals Inc (NASDAQ:INO) scored a critical partnership, while CymaBay Therapeutics Inc (NASDAQ:CBAY) reported upbeat data on its liver disease drug.
INO Stock Could Benefit From Short Squeeze
The Coalition for Epidemic Preparedness Innovations (CEPI) will award Inovio Pharmaceuticals up to $56 million to advance its DNA vaccines for Lassa fever and MERS. As a result, INO stock is up 3.9% to trade at $4.94, and has rallied 30% from its four-year low of $3.76 on Feb. 9. However, the shares are still staring up at their 160-day and 200-day moving averages, which have rejected rebound attempts since a bear gap in July 2017.
A short squeeze is helping fuel the drug stock's rally. Short interest fell by 3.3% during the last reporting period, but the 10.53 million shares sold short still represents more than 12% of INO's total available float. At the equity's average daily trading volume, it would take over a week for the shorts to cover their bearish bets.
CBAY Stock Eyes Best Day Since July
CymaBay Therapeutics stock is up 15.8% to trade at $13.98, on track for its best day since July 2017, after the drugmaker reported a positive mid-stage study update on its liver disease drug, seladelpar. As such, Leerink upped its price target on the equity to $20 from $16 -- representing a premium of 43% to CBAY's current price.
The drug stock touched a record high of $15.59 on March 5, but subsequently pulled back to its 100-day moving average. Today, though, CBAY is set to top its 10- and 20-day trendlines for the first time in more than a month, and sports a year-over-year gain of 233%.
Amid the stock's recent dip, short sellers have piled on. Short interest increased by 11% during the past two reporting periods, to 2.5 million shares. This represents a healthy 8% of CBAY's total available float.