ASCO 2018 Rally Part 2: Traders Take Profits on Nice Gains
The ASCO 2018 biotech rally was almost according to the script-nice gains leading up to the meeting followed by momentum easing from profit taking and digestion of news. Overall this was a good meeting now that novel targeted, personalized cancer treatments have demonstrated efficacy and great anticipation from new platforms such as CAR-T and gene editing as they get published. New cancer drugs are still extremely expensive but with genomic profiling if we can give the right drug to the right patient and eliminate toxic chemo treatments we have made a great leap forward.
Here is a good doctor approved ASCO summary from Cancer.Net on pancreatic cancer and other cancers.
Stocks were in a broad sell-off on Thursday except for a few companies in our universe.Biotech stocks are mixed today in early trading with a bias to the upside: ACOR, ARRY, CRSP, ECYT, EDIT, FMI, ICPT, LOXO, VRTX all making >1% gains. This rally has favored small and mid caps with large caps lagging (IBB) up 6.8% over the past month.
We have covered most of the major news items in previous posts but here are some additional notables for the week:
- Array Biopharma(ARRY) is expecting FDA approval this month for BRAF-mutant advanced melanoma combination therapy this month. Overall median survival was 33.6 months.
- Endocyte (ECYT) announced enrollment for a Phase 3 study of a targeted therapeutic of PSMA-17 for mCRPC prostate cancer. Phase 2 data were also presented.
- GRAIL presented cDNA (liquid biopsy) using genome sequencing assays data in poster sessions for early detection of multiple tumor types including breast cancer. Detection rates for early stage lung cancer are 38-51%. GRAIL is an Illumina (ILMN) spin-off.
- Immunomedics (IMMU) has been on a tear in 2018 and up 43.5% over one month. Data was presented for their antibody-drug conjugate (ADC) technology in a Phase 1/2 study for metastatic breast cancer mBC. A BLA was submitted to the FDA for metastatic triple negative breast cancer on May 21, 2018.
- Incyte (INCY) a former high flier has begin to recover up 11% for the past month.The stock was hit hard by the Phase 3 failure in late April of the combo therapy of epacodostat and Keytruda for metastatic melanoma.
- Ligand Pharmaceuticals (LGND) is one of the top mid-cap stocks for 2018. No new data we’re presented at ASCO but the Company has a partnership with Amgen (AMGN) for Kyprolis indicated for multiple myeloma with Q1 sales of $221M.
- Seattle Genetics (SGEN), a leader in antibody-drug conjugates (ADC) was up 24.4% for the past month presented Adcetris in combination with chemotherapy in newly diagnosed stage III or IV classical Hodgkin Lymphoma (HL).
As of early Friday trading biotech stocks are holding after a brief sell-off yesterday. But the momentum is easing and there are no technical breakouts on ETFs, so it might be better to wait before adding new positions.Most of our portfolio picks are up substantially for the year. We recommended that traders take profits on XBI at $97.