aTyr Pharma (ATYR) shares remain in focus on Thursday after controversial American investor Martin Shkreli revealed a short position against the biotherapeutics firm.
According to Shkreli, investors should pull out of aTyr shares at current levels as they could crash as much as 80% within the next six weeks.
aTyr Pharma stock has been on a tear over the past four months and is currently up roughly 102% versus its year-to-date low in early April.
Why Is Martin Shkreli Short ATYR Stock?
Martin Shkreli has built a short position in ATYR shares because he believes the company’s lead drug, efzofitimod, is ineffective in treating systemic sclerosis-related interstitial lung disease (SSc-ILD).
In his recent X post, the investor, who’s been barred from the pharma industry for life, argued the drug’s Phase 2 data is misleading compared to published results and clinical trial records, citing outliers and poor data quality.
Shkreli also criticized efzofitimod’s preclinical data, adding its mechanism of action (MOA) lacks scientific rationale. In his words, it’s a “really bad drug” for a “really tough disease.”
ATYR Shares Run the Risk of Manipulation
Even without Shkreli’s warning, ATYR stock is not particularly exciting as an investment, at least not at current levels.
A 90% increase in the aTyr share price within just a few months raises huge red flags given the biotech company is yet to start generating any revenue.
Moreover, trading under $5 per share, ATYR is a penny stock, which makes it highly speculative and vulnerable to price manipulation, especially from sizable public calls or social media hype.
Low liquidity and retail-driven sentiment can amplify volatility, making it a target for aggressive trading strategies.
Wall Street Still Remains Bullish on aTyr Pharma
Despite the aforementioned challenges, however, Wall Street remains largely bullish on ATYR shares, reflecting confidence in the company’s lead asset, efzofitimod.
The consensus rating on aTyr stock currently sits at “Strong Buy” with the mean target of roughly $20 indicating potential upside of some 300% from current levels.
