Biotech Stocks Hold Despite Last Thursday’s Sell-Off
All in the Technicals For Now, Large Caps Look Steady
Biotech ETFs lost momentum last week but held near term support near the 20 Day moving average. Now that most companies have reported we should not expect fundamentals to create volatility. Rather we may be stuck in a trading range buffeted by macro events and geopolitical news. The XBI could be more volatile because of its correlation with small caps and M&A. However from a technical standpoint we should hold the mid-range of the 2019 gains e.g. XBI at $75.
Many of the large caps have traded off their post-earnings bottom and should be strong holds. Although the IBB is flat YTD and over one year, many individual stocks are doing well.The best performing large caps over 52 weeks (% performance) are:
Roche Holdings ADR (RHHBY) Up 3.6% at $33.76.
Merck (MRK) Up 37.72% at $77.52. Priority review for Keytruda.
Regeneron (REGN) Up 18.73% at $406.86.Reduced prices for Praluent in U.S.
Vertex Pharmaceuticals (VRTX) up 19.29% at $181.34.
As you know Bristol Myers (BMY) merged with Celgene (CELG) and recent financial reporting looks good for Celgene with top and bottom line double digit growth.
We reported earlier that Gilead Sciences (GILD) missed on Q4 due to an impairment charge of $820M related to the Kite Pharma acquisition for CAR-T technology.
Abbvie (ABBV) is down 9.7% over one month due to an earnings miss so if you like contrarian plays, ABBV pays a 5.37% dividend and has good value at a P/S of 3.64 and 2019 guidance for 10% EPS growth.
Here are Large Cap Biopharma metrics from last year at this time.
Disclosure: Long ABBV CELG GILD MRK RHHBY