Lackluster Trading In Biotech:Sell-Off Continues In Smaller Caps

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 get link 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 see url 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 go 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.


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