2 Drug Stocks Climbing on FDA News

A short squeeze could propel CRSP higher

Two pharma names are scaling the Nasdaq this morning, thanks to favorable rulings from the Food and Drug Administration (FDA). First up is CRISPR Therapeutics AG (NASDAQ:CRSP), up 9.1% to trade at $40.52, after the FDA granted fast-track designation for CTX001 -- atreatment of transfusion-dependent beta thalassemia, a blood disorder -- made by CRISPR and Vertex Pharmaceuticals (VRTX).

Thanks to a late-February bull gap, CRSP stock broke out of a channel of lower highs and lows that started last May. Today, the shares are attempting to end atop the $40 level -- an area that has served as resistance for the last month -- and their 200-day moving average, which would mark a feat not accomplished since September. CRSP has now added more than 30% in 2019.

A short squeeze could keep the wind at the equity's back. Short interest increased by 18.5% in the two most recent reporting periods, to a record high 5.26 million shares. This accounts for a healthy 17.6% of CRSP's total available float, and nearly two weeks' worth of pent-up buying power, at its average pace of trading.

Then there's Kamada Ltd (NASDAQ:KMDA), up 8.5% to trade at $6.54, earlier tapping a nearly two-year high of $6.70. This morning, the company said it received a letter from the FDA stating it had satisfactorily addressed concerns regarding a study of its Inhaled Alpha-1-Antitrypsin to treat a genetic disorder. Kamada expects to initiate a late-stage trial in the second half of 2019.

This is pacing to be Kamada stock's best day since June 2017. KMDA shares have struggled to top the $6.25-$6.50 area since September, and were rejected herein late February. However, their subsequent pullback found support at their 200-day moving average. Today's news could prompt more analysts to take a look at Kamada stock. Only two brokerages are currently in coverage, doling out "buy" ratings and a $9 price target.