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%|