Rayno BioBeat #7: Biotech Green Screen Day Off Recent Bottom…Update-2

Update 12/12/17 Biotech Rally Stalls at Resistance

  • Celgene (CELG) holds $109.
  • Mid-caps red especially INCY PTLA RDUS.
  • Mixed market on low volume.
  • Alexion (ALXN) trying to bounce.

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Update 12/10/17 Can the biotech rally continue this week with ASH news?

  • XBI hits $84 the one month peak
  • IBB at $106 the one month peak
  • Celgene (CELG) lifts off bottom to $106 up 3.87% over 5 days (new pick)
  • Look for momentum in selected names from American Society of Hematology Meeting ASH  including our top pick bluebird bio (BLUE)
  • Other stocks to watch: BMRN BPMC CELG GILD KITE NVS

Bitcoin Updates here….and here….

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Biotech Green Screen Day: Consider A Little Overweighting for a Rally though January

SAGE Therapeutics News could have been a Catalyst Today

Are Traders Bored with FAANG and Back to Biotech Basics?

A little rally began at the open with many stocks and ETFs holding gains. Our favorite trading vehicle the XBI is up over 2% holding the $82 mark but short of December high of $86 and major resistance. The one month trend is still weak but this good be a good entry for new positions. The IBB is also up about 1.5% to $104 but $106 the December high. So no breakthrough trend but a nice bounce if it holds.

Healthcare and biotechnology have been weak sectors lately as investors have been more focused on financials and industrials .The WSJ noted today in an article by Chelsea Dulaney that correlation between S&P sectors is at an all time low of 20% which bodes well for active equity managers. You can see this in the abrupt sector shifts recently out of the high flying technology stocks into financial stocks. But trading in biotech small caps has been active and a bullish signal.Healthcare stocks tracked by the XLV have been choppy but flat over 3 months.

The Rayno Biopharmaceutical Portfolio is doing well this year and we look to Celgene (CELG), a new pick for bellwether large cap performance at the $102 level. We expect CELG to outperform the IBB going forward in 2018.

Here are selected updates on the Rayno Portfolio stocks:

  • Amgen (AMGN) has been a core Rayno holding and is up 20% YTD but off September highs and outperforming the IBB.
  • Abbvie (ABBV) is our top large cap pick up 50% YTD. Abbvie is a leader in immuno-oncology and chronic diseases in rheumatology and dermatology. Latest news includes data from IMBRUVICA Phase 3 study.
  • bluebird bio (BLUE) is up 172% YTD is one of the leading players in gene therapy, gene editing and immuno-oncology.The broad product pipeline, with several partners including Celgene, targets,hemoglobinopathies, multiple myeloma, CNS and oncology. Today the Company announced a CAR-T deal with TC Biopharma a Scottish Company.
  • Foundation Medicine (FMI) is a pick from 2016 that is up 249% YTD. FMI is a leader in precision medicine and genomic testing for treatment of oncology patients. Roche is a major partner and equity holder.
  • Among other large cap dividend payers in our portfolio are Biogen (BIIB), Bristol Myers (BMY) and Gilead Sciences (GILD) but they are underperforming the IBB.

Mid-caps look strong today a good indicator: ALNY, GWPH, NBIX, VRTX . SAGE Therapeutics (SAGE) rocketed up 76.5% and 111% YTD on positive results for a breakthrough depression (MDD) drug. ALKS and TSRO are laggards.

Several major investor meetings are coming up through mid-January 2018 that could rally the market with new clinical data and guidance for 2018. The tape looks good today but we need follow-through given the backdrop of negative macro and spectre of drug pricing news.

Watch the Denali Therapeutics focused in neurodegenerative diseases upcoming IPO as an indicator for sector strength.

Disclosure long ABBV, BMY, FBIOX, RHHBY and several small caps.

XBI SPDR S&P Biotech ETF daily Stock Chart

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