Biotech Stocks Pause at Resistance: IBB…Update-2…Caution

Update-2… 9/29 Caution on Biotech-Major Sell-Off with IBB off 3.12%

The market had a bad day today hit by Wells Fargo (WFC) Congressional hearings and paranoia about Deutsche Bank AG (DB). Unrelated to this news was a major sell-off in biotech stocks with pricing concerns back in the news. Voters in CA can vote on Proposition 61 the Drug Price Relief Act which would offer more drug discounts comparable to lowest gov prices. Biotech stocks were down across the screen in what has to be one of the worse days of the year. The XBI was also off 3.36%. If you are a trader you can hedge with Direxion Daily S&P Biotech Bear 3X (LABD) up 10% today.

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Update-1… 9/27Another Good Day especially for Smaller Caps

  • Gene therapy stocks BLUE up 2.39%, JUNO up 12.72%, KITE up 9.2%.
  • Emerging mid-caps AGIO up 3.5%, ALKS up 2.49%, ALNY up 2.79%, ICPT up 3.68%.
  • Small caps ACRX up 6.35%, CCXI up 11.81%  ITEK up 7.43%
  • Large caps REGN up 4.29%.
  • XBI up 1.45%.

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Biotech Rally Pauses But Clinical News and M&A Underpinnings Create Surge in ARRY and GWPH

Stocks were weak across the screen today with the NASDAQ down 0.91% as investors may be distracted by the upcoming Presidential debates and the plethora of opinions on election politics affecting  the market. The XBI is just a tad off recent tops down 0.54% but outperforming other ETFs YTD.The IBB could not break through resistance of at recent highs of $300 and was down 1.2% today to $294.53. Large caps could not find buying interest and Celgene (CELG) took a surprisingly big 2.85% hit on good volume. A Fortune article focused on CELG insider selling. Celgene is one of our major indicators of the biotech market rally from a bear market and is still down 11.23% YTD.

Despite choppy trading there were several big winners:

  • Puma Biotechnology (PBYI) was up 2.35% on average volume after last week’s positive FDA acceptance of the Company’s neratinib marketing application.
  • Array Biopharma (ARRY) rocketed 81% on news that its treatment of metastatic melanoma (BRAF Mutant) met its primary endpoints in a late stage goal.
  • GW Pharmaceuticals (GWPH) soared 17.2% to a 52 week high on a second Phase 3 pivotal trial for cannabidiol for treatment resistant childhood onset epilepsy.
  • Ariad Pharmaceuticals (ARIA) continued its run now up 15% over five days on takeover speculation.

Look for news and action tomorrow on gene therapy and CAR-T stocks like BLUE JUNO and KITE.

Disclosure: long ARRY FBIOX PBYI

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