Biotech and Healthcare Stocks Notch -Up with  Bullish Tape Action 

Since we called the early October reversal for healthcare and biotech stocks we have seen great gains of 5-7% with more gains ahead assuming good clinical news and M&A. Friday we saw a good tape with a 2.54% gain in the XBI always a bellwether indicator. We approached bear market levels with both the XBI and the XLV as the incessant trade war uncertainty  mashed-up with healthcare restructuring such as “Medicare for all” scared investors in August. Those fears may be still with us but large cap stock earnings appeared to assuage fears for now.

Nasdaq held onto gains of 0.48% today with small gains for the week despite a dip on Wednesday.The XBI was flat for the week but hit $84 a high over 4 weeks.. The IBB also had a good four weeks hitting $110 a level not seen since July 3.

The market overall had another good week with the S&P 500 up for five weeks in a row despite all the uncertainty of global trade and an S&P 500 Forward PE ratio of 17.2x. Investors seem to be more optimistic about 2020 and many strategists believe in 4-8% EPS growth for 2020. Recession talk for now has faded.

As we wrote in a previous article Large Cap Biopharma stocks have done well in October and last week all were up, even Gilead Sciences recovered from a government lawsuit. Our top picks: ABBV, BMY RHHBY  are all trading near their 52 week highs and on Friday the laggard Regeneron (REGN) soared 4.72% to $341.79 maybe from news on its ASH clinical presentation abstracts on bispecific and C5 antibodies. AMGN, CELG and VRTX are all trading near their 52 week highs.

The American Society of Hematology will be December 7-10 in Orlando FLA and should be a pivot for many biopharma stocks.

There are investors who are still cautious on biotech as a Piper Jeffrey analyst pointed out that there were $3.4B of outflows from biotech funds.

  • Amarin (AMRN) is get back on track with a 4.3% gain to $17.48  on Friday.
  • Gene therapy stocks had another green screen day so we got back into CRSPR Therapeutics (CRSP) at the $50 level. Other big 3% movers were ALLO BOLD RGNX SGMO SRPT.
  • Mid-caps were very strong with the following stocks up today and near 52 week highs: ALNY INCY MRTX NBIX SGEN. The outlier was Anaptys Bio (ANAB) down 71.85% on a Phase 2b atopic dermatitis drug failed to meet its primary endpoint.

The Healthcare Select SPDR Fund (XLV) was up 0.73% on Friday with a steady climb over one month of 7.2% on the same trajectory as the IBB up 12.9% for a month. And last week other laggard DJ sectors did well: Materials up 2.96%, Oil and Gas up 1.89%, and Financials up 0.70%.


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