Analysts Think These 2 Pharma Stocks Can Soar

Call volume has been running hot on AUPH this week

Oct 16, 2019 at 12:30 PM
facebook twitter linkedin

SVB Leerink waxed optimistic on Aurinia Pharmaceuticals Inc (NASDAQ:AUPH), saying the stock could rally 250% if late-stage trial data for the company's kidney inflammation treatment shows a remission rate above 20%. The brokerage firm said even less-favorable results could spark upside of up to 140%. The data is expected some time this quarter.

In reaction, AUPH stock is up 8.1% today to trade at $5.05, but running out of steam near its 20-day moving average. The shares have sold off sharply since their most recent rejection in the $6.60 region about a month ago -- which SVB Leerink says has created a buying opportunity -- and hit a two-year low of $3.52 on Oct. 10.

AUPH options volume is running quick amid today's surge in share price, with nearly 5,000 call contracts on the tape so far -- four times what's typically seen at this point, and quadruple the number of puts traded. The December 6 call is most active, though it's not clear if positions are being opened or closed here. The December 5 call was popular during Tuesday's heavy trading, too, with more than 6,500 contracts initiated overnight.

auph stock daily price chart on oct 16

Avid Bioservices Inc (NASDAQ:CDMO) stock is up 0.4% at $5.06, after Craig-Hallum initiated coverage with a "buy" rating and an $11 price target -- more than double yesterday's close at $5.04. Analysts are already bullish on the pharmaceutical contractor, with the stock boasting 100% "buy" ratings, while its average 12-month price target sits all the way up at $9.50.

Skepticism has been ramping up on the stock, as it tests support near the site of a late-June bull gap -- which may have amplified its sharp September sell-off. Short interest on CDMO stock jumped 11.5% in the last two reporting periods, to 1.95 million shares. This represents 3.5% of the security's available float, or 6.6 times the average daily pace of trading.

cdmo stock daily price chart on oct 16


Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!