Update-2…3/22 ABBV News Kills Momentum of Biotech Stocks 

12:30P EDT Abbvie (ABBV) down 13.5 % on disappointing results on blood cancer drug. The big issue is that the drug was recently acquired for $5.8B from Stemcentrx back in 2016. The Company will not seek accelerated approval for Rova-T in Third-Line treatment of patients with relapsed/refractory small cell lung cancer. This news could curb biotech sentiment because it reminds investors about the risks in drug discovery and development.

This news along with general macro concerns about data mining from FB, tariffs, rising interest rates and technical resistance has fed the sell-off. ETFs down over ~1% with market indices: FBT 0.93%, IBB 1.14%, XBI 1.4%.

Celgene (CELG) teetering at recent bottom under $88.

NASDAQ is down 1.24%.

XBI SPDR S&P Biotech ETF daily Stock Chart


Update-1… 3/21/18

Good Rally Behind the Scenes Not Showing Up in ETFs

Although the XBI was up 0.9 % other Indices lagged including major markets like the S&P down 0.18%. Rallying with the XBI was the Russell 2000 up 0.57% and the IJR up 0.43%. Nonetheless there was underlying strength in all the small and mid-cap biotechs awaiting the next deal or news cycle. FED raised rates as expected with little equity impact.

 Facebook news still in background maybe holding back investors.

Celgene (CELG) caught a bid with a JPMorgan upgrade but still at $88.31.

Mid-caps had many big movers: AGIO ARNA INCY FMI GWPH PTLA TSRO etc.

Trading has become speculative but its shows a lot of investor interest aside from the political drama.


Biotech Green Day With Good Tape Action

Major biotech ETFs were flat to slightly down today but still outperform the market YTD. Despite a rough session over the past five days the FBT is up 8.8% and the XBI is up 5.6% YTD compared to a flat SPY. Although Facebook (FB) and social media stocks (SOCL) still dominate the news many biotechs were movers from specific news and perceived opportunities from clinical news, deals and M&A.

Arena Pharmaceuticals (ARNA)was up over 28% to $39.75 today (but ticked lower AH as usual on a secondary offering) on  positive drug trial results for Etrasimod in ulcerative colitis.

Other movers in the mid-cap space were AveXis Inc.(AVXS) up 2% a clinical stage gene therapy Company; Alnylam (ALNY) up 1.35% today, 12.66% YTD a leader in RNAi therapeutics; Seattle Genetics (SGEN) lagged, down 1.54% despite U.S. approval of a lymphoma combo drug ; and we can’t forget the big winner YTD Nektar Therapeutics (NKTR) up  another 2%  today.  Also on the green screen today were ARRY, AGIO, EXEL and IMMU. Many other mid-cap biotechs are near the low end of their 2 week range.

Large cap biopharma was quiet today but note that Vertex Pharmaceuticals (VRTX) remains a top performer up 12.1% YTD. The Large Cap laggards over 52 weeks are: BIIB, CELG, REGN and MRK.

We hope to provide more analysis for CAR-T and gene editing stocks which have sold off over the past week many of which are up today: CLLS CRSP EDIT NTLA (except BLUE down 2.9%).

We are still in the process of reviewing all the stocks in our universe and what I have concluded thus far is that there are many good stocks outperforming the major indices, but it will require some deep diving and a broader analysis. However ,if you stuck with the Rayno Portfolio or even just XBI up 29.48% YTD you would be ahead of the NASDAQ (QQQ) up 27% over one year.


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