2 Drug Stocks Swinging Lower Today

TGTX will no longer seek fast-track approval for its leukemia treatment

Sep 25, 2018 at 2:44 PM
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The U.S. stock market is mixed, with the Dow giving up an early lead after President Donald Trump's speech to the U.N. General Assembly put trade back at the forefront. Among individual names Wall Street is watching today are healthcare shares Verastem Inc (NASDAQ:VSTM), TG Therapeutics Inc (NASDAQ:TGTX), and Tandem Diabetes Care Inc (NASDAQ:TNDM). Here's a closer look at what's moving shares of VSTM, TGTX, and TNDM.

Verastem Stock Swings Below Long-Term Support

Verastem stock climbed 3.3% yesterday on news the company's leukemia treatment, Copiktra, was approved by the U.S. Food and Drug Administration (FDA). The FDA also gave the go-ahead for the drug to be used as a lymphoma treatment. Nevertheless, VSTM shares have swung 14.2% lower today to trade at $7.67, breaching long-term support at their 40-day moving average along the way.

Although the shares are short-sale restricted today, these bearish bettors are likely cheering -- especially considering Verastem was up 191% year-to-date heading into today's trading. Short interest on VSTM jumped 9.5% in the most recent reporting period to 6.59 million shares, representing 17.8% of the security's available float, or 2.6 times the average daily pace of trading.

TG Therapeutics Stock Skims New Low After Drug Update

TG Therapeutics, meanwhile, said it is will no longer seek accelerated approval for its combination leukemia treatment, after an independent safety board said the data was not "sufficiently mature to conduct the analysis." A price-target cut to $30 from $35 at SunTrust Robinson is only pouring salt on the proverbial wound, with TGTX stock hitting a new 18-month low of $5.70 earlier -- last seen down 36.9% to trade at $5.83.

More bearish brokerage notes could come down the pike. All six analysts covering TG Therapeutics stock maintain a "strong buy" rating, while the average 12-month price target of $26.60 is a 356% premium to current trading levels and sits in territory not charted since February 2012.

Options Traders Cheer Tandem Diabetes Stock Surge

Tandem Diabetes Care raised its full-year revenue forecast to a higher-than-estimated $150 million to $158 million, citing "strong domestic sales" and the global launch of its insulin pump. And despite its recent downgrade of TNDM stock, Baird said it expects these impressive fundamentals to continue.

TNDM shares have shot up 8.8% to trade at $48.46. This is just more of the same for the stock, though, which has surged nearly 2,000% this year. Plus, the stock's recent pullback from its nearly two-year high of $52.55 on Sept. 13 was neatly contained by its rising 40-day moving average.

Options traders were positioning for a positive week, too. One of Tandem Diabetes' top options is the weekly 9/28 45-strike call, with 3,261 contracts outstanding. Data indicates a number of these calls were bought to open on Sept. 17 for a volume-weighted average price of $2.27, making breakeven at this Friday's close $47.27 (strike plus premium paid).

 

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