Choppy Market with Macro in Forefront: Currency, Turkey, iRates

Life Science Stocks Holding Up Amidst Volatility-Stay Cautious

Biotech stocks are mixed today as volatility from currency moves and violence in Turkey and the Middle East gives pause to investors. Bonds have corrected almost 5% prompting an exit from bond funds as the 10 Year Treasury hits the 2.19 % (high as 2.30) level up from 1.9% only one month ago. The low for the year in April was just above the 1.6% level. With little appetite for U.S. Treasuries the FED will have a difficult time exiting QE, nonetheless tapering is expected by year-end.

What Investors Should Really Fear — and What They Shouldn’t | Michael Santoli – Yahoo! Finance

Life Science stocks are still in a corrective or choppy mode off their April-May highs. Large cap biopharmaceutical stocks are green today with major ETFs (IBB) and (XBI) a tad into the green. With the Rayno focus stocks there are a few 1%+ movers: Albany Molecular (AMRI), Alexion (ALXN), Astex (ASTX), and Pharmacyclics (PCYC). PCYC will be presenating at Hematology conferences in Europe next month. Our mid-cap index of more than 50 biopharma stocks shows a mixed tape but  a lot of volatility and upside movers. Two “bio-bubblet” stocks that merit tracking over the coming months are Aegerion Pharmaceuticals (AEGR $74) up 192% YTD, an orphan drug play for hypercholeserolemia and Clovis Oncology (CLVS $75) up 369% YTD, a Company that has an exciting cancer clinical pipeline for EGFR and BRCA mutations.These two stocks have  ~$2B market caps, and are institutional favorites. We will provide more commentary at a later date.

Diagnostics and Tools stocks are also mixed but among Rayno Focus stocks with strength this week: Abaxis (ABAX $45.93) up 3.3%, Exact Sciences (EXAS $13.52) up 0.2% and Vermillion (VRML $3.15) up 4.3%. An activist investor group is calling for strategic actions for Alere (ALR $26) to raise cash and restructure the Company. Alere is on our focus list as a reiterated buy at $19.

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