ONTARIO, Canada ( TheStreet) --What or who is responsible for the big-time selloff in YM Biosciences ( YMI)?

Beginning a column with a question is lame -- I'm supposed to be providing answers, after all -- but in this case, nailing down an explanation for why YM Bio has shed 33% of its market value in the past week is proving very difficult. YM Bio shares were up 3 cents to $1.14 in Tuesday trading.

The volatility in YM Bio is particularly unnerving because new and important clinical data on the company's myelofibrosis drug CYT387 is scheduled for presentation at the American Society of Hematology annual meeting, which runs Dec. 10-13.

CYT387 is a controversial, at least by Wall Street's standards, due to early data presented last spring suggesting the drug may be effective in treating anemia associated with myelofibrosis. That's something Incyte's ( INCY) Jakafi, which recently won FDA approval for the cancer-like bone marrow disease, cannot do.

Incyte sports a $1.5 billion market valuation thanks in large part to Jakafi's commercial potential. But if YM Bio's CYT387 is a superior myelofibrosis drug, even being two or three years behind in development, the company's $132 million market cap makes it hugely under-valued.

Yet YM Bio shares are tanking. Here are three possible explanations, in order of plausibility, culled from various discussions with investors and other sources over the past few days. I have nothing confirmed but the truth probably lies somewhere below:

1. A large hedge fund is being forced to sell YM Bio (along with other low-conviction long positions) after being caught short in Pharmasset, which obviously skyrocketed in value when Gilead Sciences announced the $11 billion takeover.

Yes, I've heard the name of the hedge fund allegedly forced to sell YM Bio shares, but I can't confirm so I won't share. The top-five hedge fund holders of YM Bio at the end of the September quarter were (in order) Healthcor Management, Baker Brothers Advisors, Balyasny Asset Management, Discovery Capital Management and Deerfield Management.

The high volume of YM Bio shares being sold, including 7.6 million shares on Nov. 22 and 3.7 million shares Monday, suggests the forced seller is likely to be one of the hedge funds listed above.

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