Biotech stocks were in a broad retreat today for reasons that are not yet apparent as the Nasdaq and S&P were only down a modest 0.6%. Large caps that were hard hit include AMGN, BIIB,and VRTX as well as the major ETF’s
IBB and XBI. My broad index of 35 mid cap biotechs was down 3.3% with some stocks down 4-5%. With the exception of a few tiny gains every stock in the index was in the red.
The Rayno Life Science portfolio was down 3% and is now only up 9% YTD after being up 15%+. News can account for drop on specific stocks like AMGN which was buffeted by an FDA request for more information
on its anticipated blockbuster denosumab. Amgen reports earnings on Wednesday.
Large cap pharma stocks have been in a rally mode lately and were stable today with ABT,GSK and PFE down less than 1%.
We should get an analysis tomorrow as to how the sector got whacked but my guesses are:

1. Hedge fund redemptions such as the troubled Galleon Fund and its affiliates.

2. A major analyst sell call or big time shorting of an index/ETF.

3. A constellation of factors coupled with the not so great AMGN news and profit taking in a toppy market.

Carefully watch for gnarly action tomorrow and take profits from winners. We’ll wait for buying opportunities after this sell-off expires.

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