Merrimack Pharma (MACK) : trading halted amid FDA news

Shares of drugmaker Merrimack Pharmaceuticals Inc (NASDAQ:MACK) were halted on Thu, Oct 22, after the company announced its pancreatic cancer treatment has received Food and Drug Administration (FDA) approval. When trading resumed, the shares were sharply lower due to a black box warning, dropping 20% to $7.21.

 

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Short interest has been gradually rising on the stock, and now accounts for roughly one-fifth of its total float. At the equity's average trading level, it would take more than two weeks to repurchase these bearish positions.

On the other hand, analysts are extremely bullish, seemingly dismissing its nearly 30% year-to-date retreat. In fact, 100% of covering brokerage firms have handed out a "strong buy" endorsement on the security, and its consensus 12-month price target of $15 sits at levels never before seen.