Markets stabilized today with major indices up in the 0.4% range. Despite some weakness in meteoric biopharma stocks the healthcare sector is catching bids. Unloved and unwanted Johnson and Johnson(JNJ $61.87) is trying to shake off product quality issues up 2.33%, raising its 2011 guidance with EPS in the $4.90-$5.00 range.A $20B deal for Swiss medical device maker Synthes is in talks. JNJ has a PE of 12.93 and pays a 3.49% dividend. Large cap drug makers have rallied YTD. Positive currency impacts have helped sales and earnings.One factor worth mentiuoning is that a lot of multinationals have assets trapped abroad due to tax issues so buying companies abroad is more economical.
Within the Rayno Life Science Portfolio, weakness continued with YTD strong performers: Ardea (RDEA),Exelixis (EXEL), Regeneron (RGEN) and Viropharma (VPHM). Solid stocks as of late in the dx and tools portfolio are Exact Sciences(EXAS) and GenProbe (GPRO). We are still hopeful of a turnaround this year with Albany Molecular (AMRI $4.54) trading at a discount to book value.
We missed the Abiomed (ABMD $16.71) run-up from $9 in January. This cardiovascular device Company has a proprietary position for acute heart failure and revenues are growing steadily at $27M last quarter with 2011 March fiscal year end estimates at $100M and $120M for the March 2012 year.
Amarin (AMRN $15.85) down 7.2% on volume of 12M shares . Traders took some money off as the market cap passed the $2B mark. Some analysts recommending the stock had to raise their price targets quickly as stock was up over 90% yesterday,The last biotech newbie with no revenues that was acquired recently was Clinical Data sold to Forest Labs for $1.2B with upside dependent on revenue targets for the FDA approved Viibrd drug for major depressive disorder. The bulls are betting on a major deal for Amarin as a safe triglyceride/LDL-C reducing, omega -3 class drug (AMR 101) has blockbuster potential as competitive drug Lovaza has ~$1B in sales.