2 Biotech Stocks Trying to Double Today

PhaseBio and Dermira both reported upbeat drug data

Managing Editor
Mar 18, 2019 at 10:22 AM
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Two biotech stocks have nearly doubled in value today, and sit near the top of the Nasdaq. First up, PhaseBio Pharmaceuticals Inc (NASDAQ:PHAS) is up 75.3% to trade at $6.52, and earlier nabbed a record high of $8.88 -- more than double Friday's close of $3.72 -- after the company's appearance at the American College of Cardiology (ACC) conference this weekend. Specifically, PhaseBio's new data on its PB2452 drug were well-received. Mid-stage studies are set to begin later this year. 

This is set to be PHAS' best day ever by a wide margin. The drugmaker is now trading above its October $5 initial public offering (IPO) price for the first time since November.

Now, while the shares are in record-high territory, they have a ways to go to hit their average 12-month price target of $16.67. Echoing that, all four analysts following PHAS shares consider them a "buy" or better already.

Then there's Dermira Inc (NASDAQ:DERM), up 107% to trade at $14.16, and earlier hitting a new annual high of $14.91, after the company's eczema treatment met the main goal of its mid-stage study. Prior to today, the $9-$10 area had turned away DERM rallies in 2019. Now, the shares are on track to topple their 320-day moving average for the first time since January 2018, before a massive March bear gap. 

A short squeeze could provide more tailwinds for the equity. More than 10% of DERM's total available float is sold short, and it would take nearly a week for shorts to buy back their bearish bets, at the security's average pace of trading. 

There's been similar skepticism among options traders, judging by the security's Schaeffer's put/call open interest ratio (SOIR) of 1.00, which ranks 5 percentage points from an annual high. This shows a stronger-than-usual put-skew among near-term speculators. An exodus of option bears could also bee a boon for DERM.

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