Jefferies Calls Bottom on Gene Therapy Stock After Huge Sell-Off – Schaeffers Research

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Axovant Sciences Ltd (NASDAQ:AXGT) has seen its stock fall from the mid-$30 range to yesterday’s close of $3.94, even after positive data for its Parkinson’s treatment. However, Jefferies referred to the shares as “remarkably cheap” and even though it cut its price target to $16 from $24, it kept its “buy” rating in place, obviously expecting huge upside for the gene therapy specialist.

This follows the company’s earnings release last night, where it reported a loss of 45 cents, compared to expectations for a larger loss of $1.70. Despite this, the shares are trading lower again today, down 1% at $3.90.

Some options traders have been speculating on an upside move, with the June 6 and 7 calls seeing heavy trading in the past 10 days. In Tuesday’s trading, the July 4 call was popular. Overall, 349 calls were bought to open during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to 26 puts.

Meanwhile, short interest fell by 88% in the last two reporting periods, but 10% of the float remains dedicated to short interest. Going by average daily trading volumes, this accounts for 3.2 days’ worth of buying power.