CBIO Stock Reverses Course, Despite Hemophilia Study Success

Catalyst Biosciences shares were on fire prior to today

Deputy Editor
Jul 8, 2019 at 10:29 AM
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The shares of Catalyst Biosciences Inc (NASDAQ:CBIO) were up in early market trading, after the drugmaker announced its treatment, MarzAA, successfully reduced bleeding episodes in patients with hemophilia during a mid-stage study. However, unlike sector peer Sangamo Therapeutics (SGMO), CBIO stock quickly reversed course to trade lower. The stock is down 6.3% at $8.72, just coming off Friday's three-month highs. 

In fact, the equity was enjoying a serious surge on the charts before today. Since bottoming out at a year-to-date low of $6.92 in early June, CBIO not only managed to string together four consecutive weekly wins, but just racked up a 26.3% weekly surge -- the biggest since an early April spike. Now, the stock is trading back below its 200-day moving average -- a trendline CBIO toppled on Friday. 

While analysts are pretty quiet on the biopharma name, all four in coverage give it a "buy" or better rating. Plus, the consensus 12-month price target is more than three times CBIO's current price, at $27.25 -- a region the area hasn't touched since before a massive June 2018 bear gap

While shorts are jumping off the bearish bandwagon in droves, down 21.6% in the last two reporting periods, the 920,000 shares sold short still represent almost a quarter of the stock's float. Plus, it would take six days to cover these pessimistic positions, at the security's average pace of trading.

What's more, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.14 is at the bottom of its annual range, meaning short-term option players haven't been more call-heavy during the past 12 months. 

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