Rigel Pharmaceuticals heads into its May 14 earnings print with a freshly struck drug deal, a 12% pop on the session, and 21% of the float still held short.
The catalyst was a licensing agreement with Arvinas and Pfizer for a PROTAC breast cancer compound, announced Tuesday. The deal gave shorts a rough day. Short interest fell about 6% on the week to roughly 22.9% of free float — still a meaningful position at 3.9 million shares, down from a peak near 24.8% in late April. Borrow remains almost entirely a non-issue: cost to borrow is just 0.52%, barely above a risk-free overnight rate, and availability is wide open. That means the short book is not under squeeze pressure from the lending market itself — these are fundamental shorts, not trapped position-takers facing a margin call on borrow.
Options traders turned more cautious into the print. The put/call ratio climbed to 0.36, nearly two standard deviations above its 20-day average of 0.30 — the most defensive tilt it has registered in months. That shift happened gradually over the past two weeks, as the PCR drifted higher from a low around 0.25 in mid-April. It is worth noting the PCR 52-week high is 0.60, so this is elevated but nowhere near a panic hedge. Still, the directional tilt is clear: options buyers are hedging more than usual heading into the report.
The Street is bullish but divided on magnitude. Citi's Yigal Nochomovitz lifted his target to $81 this morning — up from $69 set just last week — maintaining a Buy, a sharp reversal from the modest trim he made on May 7. The mean price target across covering analysts is $53.20, against a current price of $29.37, implying the Street sees substantial room above current levels. The bull case rests on Fostamatinib's recurring revenues, the royalty and milestone optionality from the AstraZeneca rheumatoid arthritis licensing deal, and now the new Arvinas/Pfizer PROTAC partnership. Bears point to Fostamatinib's 2032 patent cliff, the difficulty of pulling clinicians away from entrenched therapies, and the binary nature of the clinical pipeline. The EV/EBITDA at 4.5x and a PE near 7.3x are notably cheap for a biotech — the company's EV/EBIT ranks in the 90th percentile on value — which limits the fundamental case for aggressive shorting but doesn't resolve the binary pipeline risks.
The ORTEX short score is 70.7 and has been drifting lower all week, down from 72.4 at the end of April. That gradual easing reflects the modest reduction in short interest over the week rather than any dramatic repositioning. Factor scores paint an uneven picture: the short score percentile rank is in the bottom decile (10th), while the DTC rank is also low at 13th — both consistent with a stock where the short thesis is real and established rather than speculative. The EPS surprise factor sits in the 21st percentile, a gentle reminder that recent prints have not been reliably positive.
The last earnings event on May 5 delivered a one-day drop of nearly 10%, erasing almost all the week's gains. Tomorrow's print lands one day after a 12% gap-up driven by deal news rather than operational beats — which makes the earnings reaction harder to read than usual. What matters most is whether the Arvinas/Pfizer partnership terms, and any update on the clinical pipeline, support the valuation uplift the market has already priced in over the last 24 hours.
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