Raygent Biopharmaceutical Stock Portfolio beats the market for 2008

My biotech picks were published in Genetic Engineering News (GEN) in February 2008. My strategy was to allocate 25% in one ETF (XBI), 50% in large caps and 25% in smaller cap biotechs. My proprietary system is based on technicals, core technology and company financials. Despite all the volatility in 2008 with declines of 34-40% for the major indices my bioportfolio had a gain of about 9% due to a 75% weighting of large and mid cap biopharmaceuticals. A huge gain of 30% as of August 15, 2008 was pared during the 4th Quarter meltdown. Microcap stocks with the exception of MITI (MicroMet) suffered large losses and 2009 should be a difficult year for companies with weak balance sheets. My 2009 forecast will be published in the February GEN.

Among the big winners in the portfolio were:

  • AMGN Amgen up 23%
  • DNA Genentech up 18%
  • CEPH Cephalon up 18%
  • GILD Gilead up 14%
  • CBST Cubist up 34%
  • MATK Martech up 8%
  • MYGN Myriad Genetics up 65%
  • VPHM Viropharma up 45%
  • XBI ETF was down 2.5%

Some of my long term holds BDX BIIB ELN and GENZ were down significantly. The iShares Biotech ETF symbol IBB was down about 10% for 2008 much better than the NASDAQ composite down 40% YTD. Read the complete story, here.

The main drivers of this market as reviewed in the article were M&A, product announcements, revenue and value.

Here are some of the picks:

Stock Company Weighting 2/1/08 8/15/08 YTD return % 12/31/08 YTD return %
XBI ETF S&P Bio 25% 55 69 25.5 53.6 -2.5%
Large Caps Buys 50% 9%
AMGN Amgen 47 65 38.45 57.75 23%
CELG Celgene 59 75.9 28.6 55.3 -6.3%
CEPH Cephalon 65 77 77 18.5%
DNA Genentech 70 98.25 40.35 82.9 18.4%
PFE Pfizer 22 20 -9.3 17.7 -19.5%
Mid/SmallCap buys 25% 3%
ALNY Alnylam 30 34.75 15.8 24.7 -17.5%
CBST Cubist 18 23.55 30.8 24.2 34.2%
CRA Celera 15 14.5 -3.33 11 -26%
ELN Elan 26 10 -61 6 -77%
EPIX Epix 3 1.92 -36 1 -66%
ISIS Isis 15 19.1 27.2 14.2 -5.5%
MATK Martech Biosciences 28 37.7 34.7 30.3 8.25%
MYGN Myriad Genetics 40 65.5 63.75 66.2 66%
SGEN Seattle Genetics 9 12.15 34.9 8.95 -1%
VPHM ViroPharma 9 13.9 54.5 13 45%
Return YTD +30% 5-9%
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