3 Pharma Stocks Making Massive Moves Today

Arrowhead is getting a halo lift from the Novartis-Medicines Co merger news

Deputy Editor
Nov 25, 2019 at 3:04 PM
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While the S&P and Nasdaq notch new highs today, three stocks in particular in the spotlight are biotechs Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR)Intercept Pharmaceuticals Inc (NASDAQ:ICPT), and Teva Pharmaceutical Industries Ltd (NYSE:TEVA). Below, we'll look at what's behind ARWR, ICPT, and TEVA's big moves today.

ARWR Stock Notches 12-Year High on Bull Note 

Gene therapy concern Arrowhead Pharmaceuticals shot up to a new 12-year high of $59.72 earlier today, after Baird upgraded the equity to "outperform" from "neutral," and hiked its price target to $70 from $39. The bull note comes after Novartis (NVS) said it would be acquiring Medicines Co (MDCO) in a $9.7 billion deal, which Baird says could mark the start of a period of consolidation in those that develop RNAi therapies.

The stock is scaling the Nasdaq, up 16.6% at $57.43 at last check, set to not only notch its highest close since August 2007, but its biggest one-day percentage jump since February.  Should this positive price action continue, more short covering could fuel even bigger gains. Short interest fell 7.4% in the two most recent reporting periods, but these bearish bets still account for 17% of the equity's available float.

Intercept Stock Continues Rally After FDA Nod 

ICPT is set to notch its sixth straight win today -- its longest streak since March -- after the firm's fibrosis drug obeticholic acid (OCA), used to treat patients with nonalcoholic steatohepatitis (NASH), was granted priority review by the U.S. Food and Drug Administration (FDA). An approval would make OCA the first-ever treatment available to patients with fibrosis related to NASH, which is expected to be the leading catalyst for liver transplants by next year. In response, the security is up 8.4% to trade at $96.34. 

Options traders have piled on the stock. So far, 6,163 calls and 1,454 puts have crossed the tape -- six times what's typically seen at this point. Quite a bit of activity has been detected at the weekly 11/29 100- and 95-strike calls, where it looks like contracts are being sold to open. Some sell-to-open activity could also be taking place at the weekly 12/6 100-strike call, and the January 2020 110-strike call. 

Options Bears Blast TEVA Stock on Bloomberg Report 

A Bloomberg report that Teva Pharmaceutical Industries, along with other drug companies, is in talks with the U.S. Justice Department to put an end to a years-long generics price-fixing probe. The stock touched a six-month high just south of the $11 region earlier, and is now up 4.9% at $10.73. 

Options players are bombarding the stock, with 201,000 puts across the tape so far -- seven times the average intraday amount. Digging deeper, the March 12 and 11 puts are especially popular, with positions being opened at both. This put-heavy behavior is quite unusual for TEVA, though. On the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 10-day call/put volume ratio of 3.21 that sits in the 78th percentile of its annual range. 


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