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|
|% Up YTD||174%||347%|
|Stockholder Eq||$126.7M||$120M* excl 3.33M secondary at $72|
|Disease Focus||Orphan Drug||Cancer, targeted therapy|
|Pipeline||Justapid, approved||CO-1686 Ph.1,EGFR inhibitor|
|Rucaparib Ph.1, PARP inhibitor|