Bellicum Rallies After FDA Lifts Clinical Hold

Bellicum Pharmaceuticals Inc (NASDAQ: BLCM) stock jumped more than 16 percent on Thursday after the company announced on Wednesday afternoon that the Food and Drug Administration lifted a clinical hold on the company’s BPX-501 study.

Wells Fargo upgraded Bellicum to Outperform on Thursday, but some of the stock’s huge rally could be thanks to its sizable short position.

De-Risked

Wells Fargo analyst Jim Birchenough said the FDA lifting the hold “substantially de-risks the investment.” He's optimistic about company’s platform for controllable cell therapies for therapeutic oncology indications.

In a Phase II study, AML pediatric patients treated with BPX-501 experienced fewer relapses and a better overall survival rate than historical control groups. The study was placed on hold in January after three cases of brain damage were reported that were possibly linked to BPX-501.

Squeezed

According to shortsqueeze.com, Bellicum has a short percent of float of 15.9 percent. There are currently more than 4.4 million shares held short with 7.5 days to cover.

In the past year, Bellicum’s short interest has increased by 36.1 percent, while its share price has dropped by 37.9 percent. Short sellers have certainly had a good run with the stock, but that all came to an end on Thursday with the big rally.

Wells Fargo also raised its price target for Bellicum from $6 to $23, suggesting the short squeeze may be just the beginning.

Bellicum was trading well off its $8.70 high of the day in mid-day trading, hovering around the $7.97 mark at time of publication.

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