Update: 10:10a Tesaro (TSRO) Soars 15% to $38, short covering or bargain hunters?
Biotech Weakness in Large Caps
Mid-Caps Have Continued Strength
The overall market recovered from an early sell-off but there was pronounced biotech weakness as well as in healthcare stocks one of the best sectors of Q3 YTD with the XLV down 0.74% today but up 10.1% over the past 3 months. No discernible intermediate trend as of yet but all large cap biotechs were weak today. Alexion (ALXN), Celgene (CELG) and Gilead Sciences (GILD) weakness is notable from a technical point of view as they are trying to recover off a bottoming process.Top outperformers: AMGN, MRK, VRTX were down but fared better today. One trend to consider is whether Q3 earnings can support the huge rally we have had recently.
Mid-Caps are the sweet spot of the market driven by M&A, clinical updates and growth potential. Here are the Mid-Cap winners today from our 2018 Watch List: ARNA AGIO ICPT NBIX NKTR SRPT SGEN TSRO.
Last week we nibbled on Tesaro (TSRO) around $32 near its 52 week low . The Company has a broad pipeline of clinical stage product candidates for ovarian cancer and immuo-oncology. Most analysts have a Neutral or HOLD on the stock which hit a high of $80 in January.The stock tanked when analysts cut the outlook for the drug Zejula with 2018 revenues guided down to $225-235M. TSRO has a 19.9% short position.
We are long TSRO at ~$32.
Here are the mid-cap biotechs that are still near 52 week highs and YTD performance: IMMU at $26.70 up 67.7%, LGND at $258 up 86.46%, NBIX at $125.85 up 58.7%, NVCR at $44.95 up 121.43%, SGEN at $77.06 up 37.29%.