Investor Martin Shkreli’s big biotech short position is blowing up after the stock’s monumental rally over the past week, following a major clinical catalyst.

Popularly known as “Pharma bro,” Shkreli initiated a short position against California-based Capricor Therapeutics Inc. (NASDAQ: CAPR) two weeks ago, referring to the company’s HOPE-3 cell therapy for Duchenne Muscular Dystrophy as “COPE-3.”

“It will not work. This is the company's only asset,” Shkreli said, yet the company cleared a major regulatory hurdle last week, with results showing “strong and definitive evidence that Deramiocel can meaningfully improve the course of Duchenne muscular dystrophy.”

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This led to a monumental rally in the stock, with its Momentum scores in Benzinga’s Edge Rankings following suit with a sharp spike over the course of the past week.

Biotech Stock’s Momentum Score Spikes

The Momentum score in Benzinga’s Edge Stock Rankings is assessed based on a stock’s price movements and volatility across multiple time frames, before being ranked as a percentile against all other stocks.

A surge in a stock’s Momentum score is often indicative of a big uptick in volumes, volatility and the share price, often a result of a major news or fundamental catalyst.

Capricor Therapeutics

Following the positive results of its phase-3 HOPE-3 trial evaluating Deramiocel to treat Duchenne Muscular Dystrophy, the stock soared 440% within just one day, destroying Shkreli’s short position, which was expecting the stock to settle at around $2 per share.

Shkreli has responded by criticizing the data, accusing the company’s CEO, Linda Marban, of lying and giving the results a positive spin.

The stock’s momentum score has nonetheness witnessed a steep surge, rising from 3.83 to 96.4 within the span of a week, following its strong rally. Besides this, the stock has a favorable price trend in the short, medium and long terms. Click here for deeper insights into the company, its products and operations.

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