Big Rally in Biopharm coming off technical bottoms

how to buy modafinil europe Biotech and large cap pharmaceutical stocks rallied today overcoming fears of the Obama administration healthcare
initiatives that created a bearish pall on the industry. The mood is reminiscent of Hilary care in the early nineties (see my article in Genetic Engineering News 1/1/09 on the Waxman agenda). The selloff since mid-February has been brutal with even diversified large cap healthcare stocks such as Abbott (ABT) and JNJ off 15-20%. European large cap drug stocks such as Glaxo and Novartis are at levels not seen since the early 90’s. Yesterday the XBI touched mid-2006 lows and the broader based IBB hit the lows of 2004. Both ETF’s are up over 4% today. Even Merck and Pfizer near 1995 lows are up 8% today. The recent consolidation wave continued today with Gilead’s(GILD) acquisition of CV Therapeutics (CVTX) for $1.4B topping the rejected offer of Astellas of Japan at $1B. The rally has spilled over to MedTech with many stocks up 2-4% or more such as BDX,BSX,GPRO, IMA and MDT.
My mid-cap index of 33 biotech stocks is up 6%.My 2009 Biopharmaceutical portfolio is up 4% today although it is off 7% YTD. Keep in mind that the financing window is still closed for smaller cap biotechs so cash positions of ~2 yrs. is critical.

While the bear market may have many months to go in these uncertain times and the “safety” label taken off healthcare stocks this is a good entry point for long term buys for mid-sized companies with revenue momentum and large cap stocks with dividends and pristine balance sheets.

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