2/17 Mid-day trading shows healthcare and biopharma gainers , tech losers as FEDspeak (Bullard, Nestor) reiterates rates rising juxtaposed with recession risk rising. Large cap winners: ABBV,AMGN, GILD, MRK etc. UNH up 1.38% XLV up holding above $130 November lows.
2/15 late day trading…… Biogen (BIIB) slips despite beat on earnings.All about Alzheimer’s Disease Drugs.
- Biogen full year revenue $10.173B with GAAP dil.EPS $3.79.Phase 2 drug targeting tau drug. PE is 14.73, P/FCF is 18.60.
- Zoetis (ZTS) beats with stock surge and upbeat guidance.2022 revs of $8.1B and $4.49 dil. EPS.Animal health pet sales rose 10%.
- Good action in spec biotechs CYRX,CRSP, MDGL, PACB,VCYT.
2/14/23..Market Shows Resilience Fights Off CPI, in choppy trading.
===========
The S&P recovered from lows to end flat at 4136.CPI rose 6.4% a neutral level from a market perspective but keeping the FED on track to raise rates in March as expected. The NASDAQ rose 0.57% to 11,960 buoyed by tech stocks and the new AI theme. AMD and NVDA found buyers. Small cap biotech was active with many favs showing gains. The XBI rose 0.37% holding the $85 level. ARKG did better up 0.83% to $32.80.
Biogen earnings tomorrow.
====
Large Cap Biopharmaceutical Stocks Hit by Bearish Sentiment
- Large cap biopharma are off their highs despite reasonable valuations plus dividends.
- Capping of prescription drug prices for seniors remains a big political concern.
- Macro and sentiment dominate trading with S&P Range bound 3600-4200.
Biopharma stocks took a hit last week as investors shifted to to other sectors amidst the usual FED rate rise concerns and now some hard criticism of the drug industry by Biden in his State of the Union speech. Also a bearish article in the Wall Street on Saturday offered bleak prospects on funding for early stage companies because of higher interest rates, geopolitical tensions with China and dire prospects for an exit through IPOs. But the companies mentioned are relatively unknown and maybe do not have broad and deep product pipelines. We know that 2021 was boom times for biotech funding so maybe too many companies were created. Nonetheless we need to look at funding of smaller companies so that they can advance their pipelines. Also since valuations of many SMID companies have come down this could create more M&A, and certainly more licensing deals. Large and mid-cap biopharma companies have strong balance sheets and need to bolster their pipelines.
Need hard data on funding for small and mid cap biotechs.
Last week was a down week overall with inflation and this week’s CPI on traders’ minds. The energy sector was a winner up about 5% with strength as well in commodities. Healthcare stocks were flat but the real issue was weakness in the small caps with the IJR down.3.46% and the Russell 2000 (IWM) down3.36 %. Techs stocks are more in the forefront with AI.
Many large cap biopharmaceutical stocks are now down significantly YTD: AMGN 7.67% , ABBV 5.92%, LLY 5.67% but remain strong holds with good dividends above 3%. In early trading today biopharma stocks are holding up. Our favorite large caps for 2023 are : ABBV, MRK, REGN, VRTX. Good dividend plays are BMY GILD and PFE.
- The IBB now at $134, needs to hold $130 for a bullish uptrend.
- LLY is most overvalued because of bullish prospects for obesity drug Mounjaro.
- See our recent article on the sell-off of smaller cap speculative biotechs with the XBI at $85 level but still up YTD.
- Top 52 week winners are: AZN,GILD, LLY, and MRK.
- ABBV took a hit on HUMIRA competition from biosimilars.
We remain long term bullish on biotech stocks but you need to follow technicals until we get through this muddle.
Long ABBV, BMY, GILD, MRK, LLY, REGN and VRTX. Biogen reports 2/15 Wednesday..
| Company | Ticker | Price | Price | Price | MktCap | % Perf | ||||||
| 1/15/18 | 2/11/23 | 11/1/19 | 2022 | 1 yr | FWD | Analyst | % | 52 week H | YTD % | |||
| $B | P/S | PE | Recom | Div | ||||||||
| Abbvie | ABBV | 100.000 | 152 | 81.75 | 263 | 6.54 | 4.55 | 13.61 | 2.4 | 3.89 | 165.78 | -5.92 |
| Alexion*(ALXN) | ALXN | 123.000 | 182.5 | 109.38 | 40.33 | n/a | 4.56 | 9.38 | 2.2 |
*acquired by AZN
|
||
| Amgen | AMGN | 185.000 | 242.5 | 221 | 128 | 5.98 | 4.87 | 12.88 | 2.7 | 3.51 | 288 | -7.67 |
| AstraZeneca* | AZN | 35.000 | 68.88 | 40.34 | 209.34 | 17.54 | 4.72 | 16.4 | 2 | 2.11 | 71.7 | 1.59 |
| Biogen | BIIB | 336.000 | 286.3 | 299.2 | 41.33 | 30.11 | 3.99 | 18.24 | 2.2 | – | 306.28 | 3.39 |
| Bristol Myers* | BMY | 63.000 | 72.2 | 57.16 | 152 | 8.56 | 3.29 | 8.8 | 2.3 | 3.16 | 80.59 | 0.35 |
| Celgene* (BMY) | CELG | 106.000 | n/a | 108.53 | 77 | n/a | 4.69 | 8.7 | n/a |
*acquired by BMY
|
||
| Gilead Sci | GILD | 79.000 | 86.7 | 61.69 | 106.6 | 40.31 | 3.91 | 12.09 | 2.5 | 3.46 | 89.63 | 0.99 |
| GlaxoSmithK* | GSK | 38.000 | 36.84 | 45 | 74.3 | -19.35 | 2.09 | 9.12 | 2.8 | 3.87 | *46.97 | 1.99 |
| Eli Lilly | LLY | 85.000 | 345.12 | 113 | 325 | 44.02 | 11.38 | 29 | 2 | 1.08 | 367 | -5.66 |
| Merck | MRK | 59.000 | 108.57 | 78 | 264.3 | 41.81 | 4.56 | 12.65 | 2 | 2.69 | 113.8 | -2.15 |
| Pfizer | PFE | 43.88 | 243.3 | -13.28 | 2.42 | 11.58 | 2.4 | 3.74 | 53 | -14.36 | ||
| Regeneron | REGN | 367.000 | 757.61 | 310.48 | 81.4 | 22.55 | 6.69 | 16.82 | 2.3 | – | 802 | 5.01 |
| Vertex | VRTX | 158.000 | 297.4 | 196 | 74.85 | 26.08 | 8.38 | 18.78 | 2.2 | – | 314h | 2.98 |
| 2/11 | 11/19 | %YTD | 1 yr | 2022 high | ||||||||
| XBI | 85.62 | 93 | 3.16 | -9.26 | 94.36 | |||||||
| IBB | 132.36 | 119.65 | 0.81 | 0.42 | 138.74 | |||||||
| FBIOX | 16.31 | 20.26 | 0.18 | 1.2 | 17.31 | |||||||
| XLV | 132.49 | 121.11 | -2.47 | 0.31 | 143.42 | |||||||
| XPH | 42.76 | 39.47 | 4.42 | -3.5 | 44.31 | |||||||
| UNH | 494.25 | 252 | -6.78 | 1.55 | 558 | |||||||
| QQQ | 299,70 | 201.23 | 12.55 | -16.39 | 371.83 | |||||||