Biotech Bull Market Momentum is Easing So Watch High Flyers: AEGR,CLVS etc- Update 6/16

Biotech Sell-Off Continues

Nothing dramatic but the overall weakness in biopharmaceutical stocks is continuing today despite a strong performance by NASDAQ up 1.2% at 3464. With biotech having one of it best years of all time, profit taking is expected.

The most popular ETFs IBB down 0.4% and XBI down 0.4% are weak but are holding at early May bottoms.

Selective MO stocks are selling off : ALXN ($91.37) off 0.92%, AEGR($63.73)  off 4.6%, MDVN ($46.33) off 8.94% and  REGN ($234.51) off 1%.

A Rayno Life Science pick Viropharma (VPHM $29.66) is up 9.2 % on buyout interest.

Diagnostic and tools stocks are performing much better overall.

 Biopharmaceutical Stocks Are Off Their May Highs- Choppy Market Reiterate Caution

The IBB ETF is holding at $175 above its recent technical support of $170 thanks to large cap biopharma stocks like Amgen (AMGN), Biogen Idec (BIIB), Gilead Sciences (GILD) and Regeneron (REGN) which have been huge winners YTD.But the technicals have been showing signs of “toppiness” so we have urged profit taking over the past month as macro issues have arisen and market drivers are are not expected during summer doldrums. Infinity Pharmaceuticals (INFI) can be a lesson as the stock has dropped from $50 to $17 as hedge funds exited prior to and during ASCO. Infinity had no Phase 2 data and speculation was based on new cancer drug targets like P13k delta .

We have made no change in our focus stocks but with MO stocks easing off their tops don’t expect big upside moves over the next few months. Here are two mid cap biotech stocks that have made huge moves YTD:

Company Aegerion Pharmaceuticals Clovis Oncology
Ticker AEGR CLVS
Price $67.7 $69.30
%  Up YTD 174% 347%
Market cap $2.0B $1.9B
Revenue 2013e $30.66M n/a
2014e $143.70M n/a
Stockholder Eq $126.7M $120M* excl 3.33M secondary at $72
Retained Earnings ($211M) ($200M)
Major Fidelity Fidelity
Shareholders PerceptiveAdvisors NEA
T.RowePrice Baker Bros.
Disease Focus Orphan Drug Cancer, targeted therapy
Hypercholestrolemia (HoFH) NSCLC,Ovarian
Pipeline Justapid, approved CO-1686 Ph.1,EGFR inhibitor
MTP inhibitor
Rucaparib Ph.1, PARP inhibitor
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