Drug Stock Sinks Lower on FDA Delay

The FDA pushed back Zogenix's application approval by three months

Pharmaceutical name Zogenix, Inc. (NASDAQ:ZGNX) is sinking lower this afternoon, suffering a notable 6.5% setback after the Food and Drug Administration (FDA) delayed the company's seizure drug application. The new target date for its Dravet syndrome drug, Fintepla, has now been pushed to June 25.

Now trading just below $24, ZGNX earlier plunged to a more than two-year low of $18.27. The equity is eyeing its fifth-straight close in the red and third notable bear gap this month. Longer-term, Zogenix stock has a steep 53% year-over-year deficit.

Short interest on ZGNX has soared 16.3% during the most recent reporting period, and now accounts for nearly 17% of the stock's total available float. With 7.13 million shares sold short, it would take nearly two weeks for short to buy back their bearish bets at the equity's average pace of trading.

Lastly, its worth nothing the drug stock's Schaeffer's put/call open interest ratio (SOIR) of 0.31, which sits in just the 17th percentile of its annual range. This suggests short-term option players have rarely been more call heavy in the past 12 months.