Top 5 Performing Biotech Shorts in 2017 - S3 Partners

S3 Partners Managing Director of Predictive Analytics Ihor Dusaniwsky highlights the top 5 performing Biotech short positions of 2017, ranked by year-to-date mark-to-market profits, utilizing proprietary data tracking $890 billion worth of short positions. Both the Nasdaq 100 ETF (NASDAQ: QQQ) and Nasdaq Biotech Index ETF (NASDAQ: IBB) are up over 20% in 2017, while the 5 biotech companies listed below are all down over 10% year-to-date, allowing bearish speculators to surpass over $100 million in mark-to-market profits in these positions.

1) Synergy Pharma (NASDAQ: SGYP) - Shares of SGYP are down 56% on the year with short speculators generating $198 in mark-to-market profits. Oppenheimer analyst Derek Achila recently reiterated his 'Outperform' rating and $9 price target, suggesting confidence in the Trulance launch, as shares appear to be testing multi-year lows, dating back to March 2016.

2) Intercept Pharma (NASDAQ: ICPT) - The FDA published a warning letter regarding ICPT's liver drug and only "commercially viable drug in production", Ocaliva, following the deaths of 19 patients. Investors may have lost confidence in the company, with shares down nearly 50% since the beginning of September. However, Baird analyst Brian Skorney calls the move an "overreaction" in his response. Prior to this devastating news for investors, ICPT was up 42% on the year as of July 20th, but now sits negative for 2017 by 56%, as shorts have racked up $197.8 million in mark-to-market profits year-to-date.

3) Opko Health (NASDAQ: OPK) - Opko Health performance year to date, down 30% despite a recent uptick in the shares, is best summarized by JPMorgan analyst Eric Joseph in a recent downgrade to Neutral, commenting, "many of the growth drivers that investors relied over the past one to two years to drive a bull thesis in the name have yet to materialize. Bearish market participants in the position have generated roughly $196 million in mark-to-market profits in 2017.

4) United Therapuetics (NASDAQ: UTHR) - Despite positive headlines and catalysts over the last 6 months including potential takeover rumors, an accelerated buyback and robust Q2 earnings beat, shares of UTHR have never recovered from the company's Q4 revenue miss on Feb. 22nd. The Jefferies March 6th downgrade to 'Underperform', best summarized the market's thoughts on the company, as analyst Eun Yun commented when shares were still trading near $150, "our physician poll indicates continuing competitor Uptravi impact on UTHR's treprostinil franchise & meaningful headwinds from generic Remodulin - potentially ~35% of current sales at risk. Yet, current consensus est's do not reflect such downside risks, particularly a potential real threat from generic Remodulin in 2018. Downgrading UTHR to Underperform from Hold, but keeping $116 PT." With shares down just shy of 20% on the year, short speculators have generated $151.2 million in mark-to-market profits, as UTHR appears headed towards the 2017 lows reached in May.

5) Tesaro (NASDAQ: TSRO) - Tesaro represents the largest average short-interest position of the Biotech underperformers at $1.23 billion notional, with the shares down 11.76% on the year, resulting in $141.9 million in mark-to-market profits for speculators. Shares currently trade around the $119 area, suggesting investors are taking cues from the Jefferies analyst Eun Yang, who reiterated his 'Hold' rating and $124 price target on August 17th, while shares were trading below $110, making fresh 52-week lows when the note was published.

Source: www.S3partners.net

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