Stay the Course for Now
We will review our holdngs next week and rebalance if necessary. Overall it has been a good week with biotech indices up about 2%. Late January is always a good time for a correction but for now it is “don’t fight the FED, don’t fight the tape”. The large cap laggards in the portfolio are Amgen (AMGN $56.63), Cephalon (CEPH $59.60) and Gilead (GILD $38). JPMorgan has Gilead as their best pick for 2011.
Small and mid-cap laggards are Celera (CRA $6.18), Nektar (NKTR) and Qiagen (QGEN $19.21). Celera has a strong balance sheet and the stock looks like it has bottomed but there do not appear to be any drivers on the horizon. Nektar has been weak over the past two months from the recent high of $15+ and needs a pipeline review.
Vertex (VRTX $39.25) been a mover lately and has gained $4 over 5 days driven by expectations of its HCV drug Telaprevir. But the market cap is a hefty $7B. Vertex is not in the Rayno Life Science Portfolio.