Biotechnology Rally Underway
The NASDAQ market recovered from near 1% losses today caused by the Cisco(CSCO) earnings report and guidance. The NASDAQ is currently flat to slightly down at 2785 recovering from the 2760 level. Expectations that Egypt’s President Mubarak would resign helped the recovery. Biotech stocks rallied with all major ETF’s -FBT,IBB,XBI-in the green. The Rayno Life Science Portfolio is up 1% led by Alexion (ALXN) up 4%,Ardea Sciences(RDEA) up 2.3%,United Therapeutics(UTHR) up 2.4% and Targacept (TRGT) up 2.5%.
Sequenom (SQNM $7.25) was up 8% on heavy volume of 8M shares on the publication of the “Locked Assay” study in the American Journal of Obstetrics and Gynecology entitled Noninvasive Detection of fetal trisomy 21 by sequencing of DNA in maternal blood.The overall classification showed 100% sensitivity and 99.7% specificity.
We are adding Albany Molecular Research (AMRI$4.68) to the Rayno Life Science Portfolio as a value and turnaround play, based on Price/Sales and Price/Book. The stock is trading at an all time low due to heavy losses of $62.9M ($2.05 sh) in 2010 on Revenues of $198.1M. Cash and securities was at $41.5M, stockholder equity was $243.8M. The market cap is $142M.We believe in the turnaround story as articulated in Monday’s earnings release by Chairman and CEO Thomas E. D’Ambra who together with his wife own over 9.2M shares. Dimensional Fund Advisors own over 2.5M shares with total shares held by institutions at 63%.9.(We own a small position in the stock)
AMRI provides contract services to pharmaceutical and biotechnology companies worldwide and analysts have worried about over-dependence on revenue royalties from non-sedating antihistamine Allegra(tm) which were $7.9M in Q4 2010.