Both stocks sold off sharply in September
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.
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.
