Japanese Pharma Stock Sinks Amid COVID-19 Treatment

AIM Immunotech is developing a vaccine that was used to contain the SARS outbreak

Shares of AIM Immunotech Inc (NYSE:AIM) were last seen trading down 22.5% at $4.73, despite yesterday announcing that the National Institute of Infectious Diseases (NIID) in Japan will begin testing its drug Ampligen, a broad-spectrum antiviral, as a potential treatment for the new coronavirus outbreak. Researchers are optimistic about the efficacy of this new treatment due to the drugs previous positive reaction with the original SARS coronavirus (SARS-CoV-1).

Despite today's plunge,the stock is up a whopping 644% year-to-date and earlier last week saw a notable bounce off the supportive 10-day moving average. Heading into today, all three covering analysts sport a "buy" recommendation. First thing this morning Alliance Global Partners also chimed in, saying it will maintain its "buy" rating and hiked its price target to $6.50 from $2.76.

Currently, AIM's short interest of 1.01 million shares accounts for a healthy 13.1% of its total available float. At the equity's average pace of trading, it would take under a week for short sellers to buy back their bearish bets.