Pendulum Beginning To Swing In CV Therapeutics' Favor

The last time we discussed CV Therapeutics Inc. (CVTX), we thought the bull case was pretty clear; growing sales of its chronic angina drug Ranexa and future approval of regadenoson for use in heart imaging studies with market potential in the hundreds of million of dollars, coupled with cost cutting and operational efficiencies would improve the bottom line. That’s probably why Cantor Fitzgerald analyst George Zavoico wasn’t afraid to reiterate his target price on the stock of $36 on Friday, adding that growth in Ranexa prescriptions continues to accelerate. But others on the Street have been slow to embrace this name.

Barring the bullish price action the past few days, the stock has had a tough time trying to regain some of its mojo due in part to the strangle short sellers have had on the stock. CV Therapeutics has been ridiculously sold short to the tune of 21.37 million shares, or about 40% of its publicly traded float of 51.44 million. It’s true, this stock can disappoint, you only need to take a look at the chart from March and April to see why there might be many skeptics here.

But the pendulum is starting to swing in the opposite direction and you can thank Jim Cramer for that. On his CNBC “Mad Money” television show Friday, Cramer said that “either the earnings explode, bringing CVTX’s price to the mid-$20s, or it gets taken over” with the combination of the two drugs we mentioned being the reason behind such an event.

CVTX 1-yr chart: