Cytokinetics (CYTK): High Short Interest—a Buying Opportunity or a Risky Gamble?

The biopharmaceutical sector has long been a land of high-stakes gambles, where clinical trial outcomes can make or break a stock. Cytokinetics Inc. (NASDAQ:CYTK) is no exception. With its late-stage drug candidate aficamten targeting heart disease, the company has drawn both investor optimism and intense short interest. But is its 18.43% short interest as of April 2025—a figure that propelled it to the third spot on a list of top “high short interest” stocks—a sign that now is the time to buy, or a red flag for investors?

The Case for Buying: Short Interest and Squeeze Potential

Cytokinetics’ short interest metrics are eye-catching. As of April 16, 2025, 14.22 million shares were shorted, representing 18.43% of its float. This elevated level of pessimism, coupled with a short interest ratio of 7.86 days—meaning it would take nearly eight trading days to cover all short positions—creates a classic setup for a short squeeze. The metric is particularly notable because it exceeds the industry average for biotech stocks, which often see shorter ratios due to higher volatility.

Moreover, institutional short sellers like Citadel Advisors and Susquehanna International Group are heavily involved, as revealed by SEC filings. Their participation signals that even sophisticated investors are betting against the stock. Yet, this same concentration of short interest can backfire if positive news emerges. For instance, a positive regulatory decision for aficamten or a partnership update could spark a buying frenzy, forcing short sellers to cover positions and driving up the stock price.

The Bear Case: A Biotech’s Volatile Reality

While short interest metrics hint at potential upside, CYTK’s fundamentals are no sure bet. The company’s pipeline hinges on aficamten, a drug aimed at treating hypertrophic cardiomyopathy (HCM). Though it has shown promise in trials, the path to FDA approval is fraught with risks. Competitors like MyoKardia (now part of Roche) have faced setbacks, and regulatory hurdles in Europe and Asia could complicate its global rollout.

The data also reveals a nuanced picture. While short interest rose by 1.1% in April, the 12.07% figure cited in some reports reflects earlier data, highlighting the lag in official short interest reporting. Meanwhile, real-time metrics like borrow fees—stuck at a low 0.39% annually as of April 3—suggest shares remain accessible for shorting, reducing immediate squeeze pressure.

The Growth Narrative: Partnerships and Pipelines

Cytokinetics’ allure lies in its partnerships. The company has licensed aficamten to Sanofi for China and to Bayer for Japan, creating a revenue-sharing structure that could reduce its reliance on dilutive equity raises. In the U.S., if approved, aficamten could command a price tag of up to $100,000 annually, given the rarity of HCM and the lack of curative treatments.

Yet, the biotech sector’s track record is littered with cautionary tales. Even with a strong pipeline, execution risks—from manufacturing snags to pricing disputes—can derail a stock. The article’s mention of AI stocks as “superior short-term opportunities” underscores CYTK’s status as a medium-term play, where patience may be rewarded but volatility is inevitable.

The Bottom Line: A Calculated Gamble

Cytokinetics presents a compelling, albeit speculative, opportunity. Its high short interest creates a structural vulnerability for bears, while its partnerships and drug pipeline offer long-term growth potential. However, investors must weigh this against the sector’s risks and the likelihood of near-term catalysts.

The 7.86 days to cover ratio suggests a higher-than-average squeeze risk, but it’s not yet extreme. A 10% increase in the stock price, if triggered by positive data, could force short sellers to scramble, creating a self-reinforcing rally. Conversely, a regulatory delay or trial setback could amplify losses for bulls.

Final Verdict: Proceed with Precision

Cytokinetics isn’t the “best” high short interest stock to buy—no stock is a sure thing—but it’s among the most intriguing. Its short interest metrics create a tactical edge, while its partnerships and drug pipeline provide a credible growth story. Investors should consider a gradual entry, with a focus on catalyst-driven price movements. For those willing to accept the risks, CYTK offers a high-reward, high-volatility play. For the faint of heart? Look elsewhere.

In the end, the market’s verdict on CYTK will hinge not just on short interest, but on whether its drugs can deliver on their promise. In biotech, as in life, hope often outweighs reality—until it doesn’t.