Rayno Life Science Portfolio Update: Biotechs beat the Market

As of the end of Q3, 2010 has been a very good year for biotechnology stocks beating both the buy Gabapentin for cats S&P (up 2.9% YTD) and the NASDAQ (up 4.9% YTD). However the QQQQ was up 7.75% YTD.

The NYSE Arca Biotech Index is up 23.5% YTD and the First Trust Amex Biotech ETF http://airbubbl.com/terms-service/ (FBT) is up 22% YTD. Other drug and biotech ETF’s are as follows YTD: IBB up 5.3%, PBE up 16.6%, XBI up 10%. The XPH is up 14.6% YTD.

The Rayno Life Science Portfolio is up a minimum of 16% and higher if the portfolio is not price weighted. We did not do any significant rebalancing only additions. Significant biopharmaceutical winners YTD (or since addition) are: Alexion (ALXN) $64.3 up 31.7%, Cubist (CBST) $23.64 up $24.6%, Exelixis (EXEL) $3.94 up 19%, Seattle Genetics (SGEN) $15 up 48.4% and  Viropharma (VPHM) $15.2 up 81%. Losers were Alnylam (ALNY) $12.40 down 30%, Auxilium (AUXL) $25 down 16%, and Gilead (GILD) $36 down 17%.

In the Rayno Life Science diagnostics and tools portfolio notable winners were: Illumina (ILMN) up 63%,Neogen (NEOG) $34.25 up 45%, and Sequenom (SQNM) $6.8 up 64%. Qiagen (QGEN) $18.1 was a loser down 19%.

See previous posts on the Rayno Portfolios. With the huge gains in September and a volatile market YTD this would be a good time to review overall performance and rebalance. A revised Portfolio will be published next week. Depending upon your strategy one positive element for biotech is that speculative stocks are gaining momentum  and good clinical news drives price. For example, Dendreon (DNDN) $41.30 is up 57% YTD. Also M&A activity is up.

Funding for small cap biotech companies  is still expensive or non-existent. Some sizable IPO’s are planned for Q4 so this will be an important driver of the market.

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