2 Biotech Stocks Seeing Strong Gains

By Josh Selway / September 25, 2017 / www.schaeffersresearch.com / Article Link

U.S. stocks are pulling back this morning as the dollar weakens. Among specific stocks in focus today are social media site Facebook Inc (NASDAQ:FB), as well as biotech stocks Intercept Pharmaceuticals Inc (NASDAQ:ICPT) and NewLink Genetics Corp (NASDAQ:NLNK). Here's a closer look at what's moving shares of FB, ICPT, and NLNK.

FB Shares Dip on Stock Plan Update

Facebook stock is down 0.6% at $169.48, after CEO Mark Zuckerberg announced he's dropping the company's plan to issue a new class of stock. Zuckerberg said FB's share price has appreciated enough that he can sell a large chunk of his stock to fund his philanthropic efforts while maintaining control of the company. The equity has gained over 31% in the past year, and could now be finding support atop its 50-day moving average.

Meanwhile, short interest has been grinding higher on the security since hitting a record low in March. In the last reporting period alone, short interest rose almost 6% -- though these bearish bets still account for less than 1% of the total float.

Intercept Replies to FDA Warning

Intercept Pharmaceuticals stock is up 7.2% at $66, after the company responded to the Food and Drug Administration's (FDA) warning of its liver drug, Ocaliva, saying it's taking steps to make sure the drug is prescribed and used properly. The shares still have plenty of ground to make up, though, as they were trading near $135 as recently as the end of July. Year-over-year, they're down over 63%.

Most analysts are bullish on the stock, however. Specifically, ICPT has 10 "buy" or better ratings, versus five "hold" or worse recommendations. More telling still, the shares have an average 12-month price target of $157.76.

NewLink Genetics Teams Up with AstraZeneca

Shares of NewLink Genetics are up 6% at $11.65, after the company announced a clinical collaboration with AstraZeneca. NLNK stock has been all over the charts in 2017, trading as high as $25.16, with a year-to-date low of $5.90. Overall, the security is clinging to a small year-to-date lead.

Plenty of traders foresee a pullback from NewLink Genetics, though. Short interest has been rising rapidly for months, and now more than 28% of the stock's float is sold short. Going by average daily volumes, this equates to almost 12 days' worth of buying power.

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