LGND News = Short Squeeze!
Short Squeeze & Speculation Could Push Onyx and Ligand Higher
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http://finance.yahoo.com/news/short-squeeze-speculation-could-push-123803437.html
Speaking of Ligand Pharmaceuticals, there was important news for the stock during Wednesday`s session. Ligand announced that its partner GlaxoSmithKline (GSK) has been granted priority review from the FDA for the supplemental new drug application for Promacta® to treat thrombocytopenia caused by the hepatitis C (HCV) virus. Thrombocytopenia is a shortage of platelet cells, which help with blood clotting and as biotech investors know, stocks tried to the treatment of hepatitis C have seen valuations increase dramatically during the past year given that the hepatitis epidemic continues to spread.
The bullish Hepatitis space`s activity; including moves from Gilead Sciences, Inc. (GILD) paying $11 billion in cash for Pharmasset and Bristol Myers Squibb (BMY) snagging Inhibitex for $2.5 billion in cash. The strong volatility seen for hepatitis c players Idenix Pharmaceuticals (IDIX) Achillion Pharmaceuticals (ACHN), Abbott Laboratories (ABT), Vertex Pharmaceuticals (VRTX) and Merck & Co. (MRK) is understandable given the suspected infection cases in more than 5 million people in the United States, and perhaps as many as 200 million around the world.
This priority review designation is given to drugs that if approved, offer major advances in treatment, or provide a treatment where no adequate therapy exists. Under the Prescription Drugs User Fee Act, the goal for completing a Priority Review is six months.
Recently, Cantor Fitzgerald reiterated a Buy rating on LGND and raised its price target from $19 to $24. It will be interesting to see if that firm increases their price target on the stock given the latest developments.
Earlier the same day, the firm had announced that it plans to report second quarter 2012 financial results on Wednesday, August 8, 2012. We note that recently, Ligand reaffirmed fiscal 2012 revenue guidance to be approximately $30 million and we know that one of Ligand`s core goals is to produce a bottom line that supports a sustainably profitable business.
Technically speaking LGND shares have an opportunity to break past some resistance that has kept prices in check. As followers of the stock point out, the stock appears poised to say goodbye to the teens, but the $18 to $18.15 mark has proven tough to break through. It has withstood some positive news events, but is worth watching because the stronger the resistance, the greater the reaction when the resistance is crossed. In turn, that resistance usually becomes strong support.
Each of these factors makes us particularly bullish about LGND in both the short and long term.