BioCryst Pharmaceuticals Inc. blew past a five-year high as Reddit investors rallied around a call to start a “#BioWar” on the bears behind a heavily-shorted biotech that develops rare disease drugs.

The stock, which recently ended development of an experimental therapy for Covid-19, rallied to close 39% higher on Monday after a poster on Reddit’s WallStreetBets forum called it “the most undervalued stock in the market” while another said a brewing #BioWar was “about sticking it to the shorts in a massive way.”

Biotechs with little to no revenue have long been the focus of short bets on Wall Street and could emerge as a new focal point for small-time investors railing against elite hedge funds. But the battleground is an already crowded arena with hedge funds positioned on both sides.

Indeed, BioCryst is a short target with about 17% of float, or $259 million, sold short, according to financial analytics firm S3 Partners. But it’s also a hedge fund pick held by the likes of Citadel, the well-known biotech outfit Baker Bros. Advisors LP, and activist investor Alex Denner’s Sarissa Capital Management.

Before Monday’s rally, shares of BioCryst had already shrugged off the scuttling of a Covid-19 trial supported by the National Institutes of Health. The company is expected to generate less than $31 million in revenue for all of 2020.

Novavax Inc., another heavily-shorted biotech, has also garnered interest across chat forums, which could benefit funds like RA Capital Management and Perceptive Advisors, which hold stakes in the company. The stock has more than doubled in the past few trading days, albeit on late-stage positive results for its Covid-19 vaccine candidate. The short position on Novavax stands at $1.5 billion, according to S3.

Throughout the pandemic, biotechs racing to find the next Covid-19 treatment or vaccine have captured the imagination of retail investors. Dynavax Technologies Corp. added another $436 million in market value on Monday on news it had both initiated a mid-stage Covid vaccine study with one partner and that the U.K. had exercised an option to order more inoculations from another Dynavax partner using the company’s adjuvant.

Inovio Pharmaceuticals Inc. also soared Monday after Twitter users jumped on a filing over BlackRock Inc.’s stake in the company. One tweet said BlackRock had doubled its position, although Bloomberg data show the stake is virtually unchanged.

Meanwhile, the motivations behind Monday’s 131% rally in Healthier Choices Management Corp. powered by Reddit was unclear as Twitter users said it was an opportunity to send hedge funds “on the run.” Short interest in the sub-penny stock, which makes vaping products and operates health food stores in Florida, appears non-existent however. The micro-cap’s largest holders were its management team.

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