Endocyte is having a nice day. Looks like the EMEA has them on their calendar this month to discuss approval of their drug. By now you have all noticed ICPT and the amazing increase in share price there. I think part of what you are seeing there is an epic short squeeze. There just does not seem to be enough shares available for the shorts to cover with. Lots of insider and institutional holders control most of the float.
Why do I compare the two. Endocyte also has a very very large holding by insiders and institutions so there is not that much of the float available for the shorts to cover with. My rough estimate is there are about 9.6 million shares out there that are traded, and 3.6 million shares are short. I don't think I am the only one that has noticed this today. Looking at buying into some calls on this one today.
ICPT only had 500,000 shares short, so I don't think this is all about a squeeze. The 500K shorts certainly got crushed and lost a ton if they are not out yet. I expect more shorts will be added soon. The trial results were outstanding, the stopped the trial for efficacy when only about half of the intended population had enrolled. The market potential large.
ECYT has over 3MM shares short and could get some squeeze, but nothing like this IMO. I would probably take the 28% and run, or sell some calls. The shorts that should be very concerned are ARNA 66 MM, SGEN 16MM and IMGN 9.5MM.
I see that the EMEA agenda had Endocytes drug on it for review this month, and the meetings took place January 7-9th. That means the meetings are over. I think the action in ECYT is the result of a news leak, my assumption is they have been given conditional approval and we will likely see the official press release in the next few days. On that note, I picked up lots and lots of call on ECYT for January and February, strike price $15.
I don't expect to see anything like the action in ICPT, but the circumstances for ECYT or setting up nicely for a short squeeze there as well. I still believe that ICPT is the result of a short squeeze, and it may be also be fueled by some big banks that are throwing gas on the fire by putting new price targets up to $800 per share on ICPT. The good news for their drug I don't think warrants more than a $5 billion market cap increase. Fun stuff if you are an ICPT employee, all 45 of them.