Analyst: This Red-Hot Pharma Stock Could Triple

Several short sellers could be feeling the heat today

While most of the stock market is struggling today, the shares of Clementia Pharmaceuticals Inc (NASDAQ:CMTA) are sitting atop the Nasdaq, skyrocketing on encouraging drug data. Specifically, the firm unveiled upbeat data on its bone disease drug -- which already has "orphan drug," "fast track," and "breakthrough therapy" designations from the Food and Drug Administration (FDA) -- and said it expects to submit a marketing application for palovarotene to the regulators in the second half of next year. Against this backdrop, several analysts weighed in on soaring CMTA stock, last seen up 37% at $14.20 -- and set for its best day ever.

B. Riley FBR, Morgan Stanley, and Leerink lifted their price targets to $20, $27, and $28, respectively. Meanwhile, Wedbush hiked its target on CMTA to $31 from $26 -- implying roughly 200% upside from the stock's close of $10.34 yesterday.

Clementia Pharmaceuticals went public in early August 2017, for an initial public offering (IPO) price of $15. The stock spent the first few months hovering just north of that level, before soaring to an all-time high of $20.15 in late December. Since a palovarotene-related bear gap in May, however, it's been a rough road for CMTA, which eventually fell to an all-time low of $8.10 in August. Should today's gains hold, the stock will will settle atop its 100-day moving average for the first time since that bear gap.

Several short sellers could be getting squeezed today. Short interest represents nearly 7% of CMTA's total available float, and would take nearly 23 sessions to buy back, at the equity's average pace of trading.