The FDA just approved the drug stock's topical Amzeeq treatment
Shares of the dermatological concern Foamix Pharmaceuticals Ltd (NASDAQ:FOMX) are looking to start the week higher, after the firm said it received approval from the Food and Drug Administration (FDA) for its topical acne treatment Amzeeq -- a reformulated version of the antibiotic minocycline, which has limited use due to some averse side effects in certain patients. It was also just announced that Foamix settled its litigation with Teva Pharmaceuticals (TEVA) regarding its Finacea Foam, though the details of the settlement are confidential.
A price target lift from H.C. Wainwright to $11 -- more than triple FOMX's current perch -- might be boosting the stock today too. This extreme bullishness is nothing new for the brokerage bunch, however. The penny stock's current 12-month consensus target price of $15.33 has yet to be touched, with a 2015 all-time peak barely brushing the level. What's more, all five of those in coverage call the equity a "strong buy."
The options pits have been overwhelmingly optimistic, too. In the past 10 weeks, 65.55 calls have been bought for every put on the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 76% of all other readings from the past year, suggesting this heavy penchant for calls is unusual.
Short sellers have been falling off the bearish bandwagon, with short interest down 1.2% in the last reporting period. These pessimistic positions still represent a solid 7.8% of the stock's available float though, and would take over a week to cover at FOMX's average pace of trading, which could add even more tailwinds on the charts should even more shorts begin to hit the exits.
While FOMX still suffers a roughly 12% loss for the year, it just came off its best week since early September, up 12.8%, thanks in part to a bounce at the stock's $2.50 level. Now, the stock is eyeing its highest close in a month -- up 5.5% to trade at $3.33 -- set to once again overtake its 40-day moving average.