EpiPen Maker Heads Toward Worst Day in 19 Years

Mylan stock is at its lowest point in years

Managing Editor
May 7, 2019 at 3:34 PM
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China fears have sparked a risk-off session, sending the Cboe Volatility Index (VIX) to a multi-month high. Also making notable moves today are medical device concern Medtronic PLC (NYSE:MDT), EpiPen maker Mylan NV (NASDAQ:MYL), and computer manufacturer Cray Inc. (NASDAQ:CRAY). Below, we will dive into what is moving the shares of MDT, MYL, and CRAY.

FDA Warns Against MDT Pacemaker Battery Life

Shares of Medtronic are down 1.3% at $88.97, after the Food and Drug Administration (FDA) put out an alert for users of certain pacemakers to watch for premature battery depletion. Inserted when someone has heart failure or experiences a slow heartbeat, the pacemaker may experience rapid battery loss without warning, leading to fatal consequences. Even with today's downside, MDT remains up 5% year-over-year.

Digging into options, MDT sports a Schaeffer's put/call open interest ratio (SOIR) of 0.46, indicating that call open interest easily surpasses put open interest among options expiring within the next three months. This SOIR is in the bottom quartile of all other readings from the past 12 months, suggesting short-term options traders have rarely been more call-biased in the past year.

Mylan Suffers Sharp Losses After Earnings

Mylan NV shares are down more than 20% at $22.51, and fresh off a six-year low of $22.33, after the company reported first-quarter revenue that fell short of analyst expectations, and failed to give an update on its strategic review. Analysts have been quick to respond, with Cowen saying MYL's drug launches are not improving systemic problems with the generic model. The firm lowered its price target on the stock to $24, while Cantor Fitzgerald cut its target price to $31. 

On the charts, MYL has been falling aggressively, pressured lower by long-term resistance at its 100-day moving average. Over the past 12 months, Mylan has shed 38%, and today's plunge has the stock on track for its worst day in 19 years. Meanwhile, the equity is sporting an SOIR of 0.23, in the bottom annual percentile, suggesting an unusual call-skew among short-term options traders.

CRAY Shorts Make a Run for It

Cray stock is up 14.1% at $29.94 this afternoon, fresh off a nearly three-year peak of $30.56, after a Securities and Exchange Commission (SEC) filing revealed the Seattle-based tech firm inked a contract with the U.S. Department of Energy (DOE). CRAY is pacing toward its best single-day gain since last May, and has added 35% over the past nine months.

Short interest on Cray stock fell 12.6% during the past two reporting periods, but still accounts for 7.3% of CRAY's available float. With 2.93 million shares still sold short, it would take bears over seven days to buy back their bearish bets, and a continued round of short covering could keep the wind at the security's back.


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