Biotech Mid-Caps- Momentum Trade is Back
ASCO Abstracts Provide Clinical Updates
But as of 2 P EDT Stocks Are Being Hit By Profit Taking XBI at $92.39
Biotech mid-caps had a good week ending 5/18 as tracked by the top performing XBI which was up 2% and over 10% in 2018 YTD. The large cap biopharma dominated IBB continues to lag because of slowing top line revenue growth and of being the target of drug pricing rhetoric. (Celgene (CELG) is down again today to new 12 mo. lows at $75.)The mid-caps, unencumbered by financial metrics, are thought to be in the sweet spot of M&A and major product launches as well as clinical breakthrough news. The current rally began on May 11 after Trump’s much-anticipated speech on drug pricing that was viewed as having less threat for the drug and biotech industry profits in the shorter term. The rally last week was helped by the release of ASCO Abstracts for the June 1 Meeting in Chicago. Undoubtedly the specialized life science funds were active traders in the market last week.
Our top mid-cap picks as well as the XBI did well last week: bluebird bio (BLUE) up 1.6% to the $183 level and Foundation Medicine (FMI) up 6.8% last week and up again today to the $87 level with CMS approval for their FDA approved genomic profiling assay for solid tumors. We added FMI to the Rayno core portfolio on JY 5, 2016 at a price of $20.40.
Why we focus on mid and small caps was evident last week in the huge moves for many of the top performing 2018 stocks on the mid-cap list below: CRISPR Therapeutics (CRSP) up 13.8%, Amicus Therapeutics (FOLD) up 19.5%, Ligand Therapeutics (LGND) up 9.4%, and LOXO Oncology (LOXO) up 22.2%.
We will continue to develop our mid-cap tracking list below to find new picks.
Caution: in previous years rallies have ended with the conclusion of ASCO. Also mid-caps can be volatile week to week.
Mid-Cap Biotech Watch List
|Company||Ticker||Price $||Revs $B||MktCap||%Perf||Analyst||
5 Day %
|First Trust Arca||FBT||11.4||1|
|Data from FinViz|
Disclosure long: ARRY, FOLD, trading XBI, many other small caps.