Merck Named Top Pharma Stock, Inks Deal with Codexis

CDXS stock has more than doubled in the past year

by Josh Selway

Published on Feb 5, 2019 at 10:18 AM

Merck & Co, Inc. (NYSE:MRK) is trying to extend its hot streak today, trading up 1.7% early on at $78.16, setting it up for a sixth straight daily win -- its best in at least a year. Traders are responding to a note out of BofA-Merrill Lynch that named MRK stock as the firm's top pick out of the pharma sector. The analyst note predicted more success from Merck's blockbuster cancer drug Keytruda, which helped drive the company's recent earnings beat.

The security was already up over 38.5% year-over-year coming into today, and is again taking aim at its Dec. 4 peak of $80.19. Open interest levels would suggest traders are expecting new highs from the drugmaker, with peak open interest sitting at the March and April 80 calls.

In related news, protein engineering specialist Codexis, Inc. (NASDAQ:CDXS) just revealed a new agreement with Merck. The news has CDXS stock trading up 7% at $20.91, bringing its one-year gain to over 136% and setting it up for its best close since mid-December.

Analysts love the stock, with all six in coverage handing out "strong buy" ratings. On the other hand, short interest is high, accounting for 8.8% of the float. As such, more technical strength could come in the form of a short squeeze.


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