Biotech Outperforming Tech Lately: M&A Hit of the Day Ardea Biosciences

The market continues its choppy trend with the QQQ‘s off  0.9% to $65 with some Internet high fliers like AMZN and NFLX taking a hit. But biotech recovered from earlier losses with the IBB down only 0.35% and surprisingly  Alexion and Regeneron recovered from earlier weakness. Gilead (GILD) and Vertex(VRTX) were also in the green. The big hedge funds who own these large cap stocks are getting very patient.

One of the earlier picks (Feb.’09) in the Rayno Life Science Portfolio, Ardea Biosciences(RDEA $31.62) got acquired today for $1.26B by AstraZeneca. Ardea has a clinical pipeline for gout and cancer. RDEA was added to out portfolio in early 2009 at a price of $12 for a 263% return.

Lately the IBB is outperforming the QQQ primarily due to weakness in AAPL ($571), down 5% over one week, which reports tomorrow. Pundits especially CNBC “Fast Money” reporters have been bashing AAPL stock as of late, mainly talking technical about the trajectory.

Within our biopharmaceutical portfolio, Optimer (OPTR $13.57) and Gilead (GILD $51.41) were also in the green. Diagnostics and tools were mainly weak.

Update 4/24  2:15 EDT

With CNBC it is AAPL all day again. Just google AAPL with CNBC and you will see the bears talking their book on AAPL. Here is news from Seeking Alpha. The QQQ sell-off continues down 0.86% and now the IBB is losing traction off its highs near $122.5 now at 121.33. Hedgies must be taking profits on MO stocks as high fliers Alexion (ALXN $88.45) and Regeneron (REGN $123.21) are selling off but still near the top of their all time highs. Also in the fast lane LuluLemon (LULU), Netflix (NFLX), Intuitive Surgical (ISRG) are down . Netflix is off 18.6% on concerns about growth after reporting earnings. Although the market is stable today (mid-cap biotech is flat) there is liquidation in MO stocks so caution and profit taking is in order.

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