Seasonality, deals and “healthcare reform lite” spur rally

On November 18 we suggested some rebalancing in the Rayno Life Science Portfolio anticipating some year-end optimism.Today we got some help from licensing M&A and financing deals.

Moreover. the dreaded healthcare reform cloud proved to be less threatening to many sectors of the healthcare market as the Dems got their votes despite unanimous Republican opposition. Lobbyists have spent almost $500 M to defend their turf and in the case of the insurance and HMO industry it has paid off as Wellpoint,Aetna,and United Health are all near or at 52 week highs.Healthcare stocks rallied broadly today with HMO’s,PBM’s, large cap pharma and biotechs up 1-2%. Certainty in the legislation appears to strike a positive note.

Within the Rayno Life Science portfolio the rebalancing in November has paid off as the IBB is up 5% from November intermediate lows and the overall portfolio is up 10% or more YTD.In November we suggested a new position in the biological and service Company SeraCare (SRLS) at $2.75 which has now rallied to $3.75+. Supergen and Cephalon, both rebalancing picks, are up 10%.

There appears to be renewed speculative interest in smallcap biotechs and we will provide updates on interesting companies like Sequenom (SQNM) and SeraCare (SRLS) soon.

Big Winners 2009 YTD are Abaxis, Inverness,MITI, Regeneron, Target Therapeutics and United Therapeutics.
The Rayno Life Science Portfolio will be upgraded and rebalanced in mid-January 2010.

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