Short selling data can help active investors avoid large losses. Short sellers tend to do their research. If they’re targeting a stock, there’s usually a good reason they are doing so.
In this report, we are going to discuss the short selling data on Oncopeptides AB (ONCO:SS). Oncopeptides is a Swedish biotech research company that specializes in the development of therapies for difficult-to-treat hematological diseases. The company’s lead product is PEPAXTO, an anticancer peptide-drug conjugate. It is listed in the Stockholm Stock Exchange and currently has a market capitalization of approximately SEK 292.4 million.
Oncopeptides AB: Short Selling Activity
We have covered Oncopeptides before. Back in July, we noted that there had been a significant increase in short interest in the first half of 2021. At the time, the company was having some issues with the FDA and there were eight funds shorting the stock, with short interest amounting to 7.6%. We saw this as a red flag and wrote: “Given the high level of short interest here, we think caution is warranted towards Oncopeptides stock right now.”
In hindsight, that was an excellent call. Since our report on Oncopeptides, the stock has fallen from SEK 44 to SEK 3.72, losing approximately 91% of its value. Much of this share price decline occurred on October 22, when Oncopeptides announced that it was withdrawing its anticancer drug PEPAXTO in the US and scaling down its organization. This announcement saw the stock plummet 65%. As a result, the short sellers – who had clearly done their research here – cleaned up.
What Are the Short Sellers Doing Now?
Have the short sellers backed off after the recent share price decline? No. Our data shows that since late July, short selling activity here has remained quite steady.
Today, approximately 5.9 million ONCO shares are on loan, which represents around 7.8% of total share outstanding. This suggests that the short sellers expect further downside from here.
It’s worth noting that there has also been some bearish insider activity here recently. Our insider transaction data shows that on October 26, Gladiator Fund, which was a 5% owner, offloaded its entire position in Oncopeptides, selling a total of 4.448 million shares.
Given that short interest remains high, and insiders are selling stock, we think caution is still warranted towards Oncopeptides shares.