Drug Stock Soars on China Pharma Manufacturing Deal

The deal will allow for manufacturing of two key CASI drugs in China

Jun 21, 2018 at 9:28 AM
facebook twitter linkedin


CASI Pharmaceuticals Inc (NASDAQ:CASI) said it's teamed up with China-based Yiling Wanzhou International Pharmaceutical Co. to manufacture entecavir and cilostazol, which are used to treat hepatitis B and blood flow, respectively. In reaction, CASI stock is 38% in electronic trading, set to open near its mid-May highs.

Last night, CASI shares closed at $5.70 -- up more than 75% year-to-date. However, the stock had shed 32% since its May 4 seven-year high of $8.42, and had recently been testing support at its 80-day moving average.

Short sellers could feel pressured to cover, should the stock gap higher. Short interest jumped 24% in the most recent reporting period to 2.11 million shares -- representing almost 8% of CASI Pharmaceuticals stock's float, or 5.5 times the average pace of trading.

Cantor Fitzgerald reiterated its "overweight" rating and $23 price target on Mesoblast Limited (NASDAQ:MESO) -- a 315% premium to last night's close at $5.54, and a level not surpassed since September 2014. The brokerage firm waxed optimistic on the Australia-based stem cell specialist's data on its treatment for children with steroid-refractory acute graft versus host disease (aGVHD), saying there were "no surprises" in the results for the late-stage study.

Against this backdrop, MESO stock is up 17.3% in electronic trading. It's been a volatile 12 months for the shares, which were trading as high as $8.55 last July, and as low as $4.74 in February. After topping out at a year-to-date peak near $7.80 in early March, the shares have spent the past three months chopping between $5.25 and $6.50.

While the majority of analysts are staunchly supportive of Mesoblast -- five of six maintain a "strong buy" recommendation -- short sellers have started ramping up their exposure. Short interest surged 26.4% in the most recent reporting period to around 80,000 shares, the most since mid-March. This still just accounts for a low 0.1% of the equity's available float, though.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners