NASDAQ at 4667  up 0.27%     XBI at $194.4 down 2.88%

Clinical Stage Immuno-oncology Stocks Hit Hard Again

Momentum traders took money off the table for the second time in three days. Most large cap biopharmaceutical stocks were in the red but down less than 1 % except Alexion (ALXN) down 2%.The Rayno Mid-Cap Pharma Motif was mainly down: Alkermes (ALKS) down 2.9%, Clovis Oncology (CLVS) down 2.85%, and Pharmacyclics (PCYC) down 1%. Our recent small cap pick Celldex (CLDX) was up 2.77% to $22.30. We recently added CLVS to our Mid-Cap Portfolio at $60.

The real damage was in mid -cap immuno-oncology including recent CAR-T players: BLUE down 2.9%, JUNO down 3.9%, KITE down 9.22% and ZIOP down 9.97%. These stocks are probably getting hit by profit taking as they have made huge runs in Q4 2014 up through the 2015 JPMorgan Healthcare Conference. Moreover, most of these companies need to raise more money to fund clinical trials perhaps triggering the sell-off  as can be seen by Alnylam (ALNY) off 9.2% and Puma (PBYI) off 11.5%.

  • There has been a huge buzz for T-cell immunotherapy beginning with the October BIOInvestor Forum .
  • Many of these stocks have multi$B Market Caps and little Phase 2 Data so valuation is difficult to fathom.
  • The JPMorgan Conference early in January  is always a bullish event but it looks like they are selling earlier this year post Conference compared to 2014.
  • Insiders are able to sell stock for some of the IPOs in 2014.
  • Momentum works both ways especially when gains are huge in a short period of time.

With volatility high and major news already out this would be a good time to let the market consolidate and stop trading. Also take some profits on high fliers. Also note that the market recovered today and all sectors were green except healthcare.

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