Rayno Biopharmaceuticals Portfolio YTD Performance and New Highs: PCYC,SGEN,REGN

Biotech Stocks Hit New Highs Unfazed By Shutdown

Biopharmaceutical stocks continued their blazing Q3 run today buoyed by assumptions that demand for pharmaceuticals will increase with 55 million new potential patients from Obamacare and that healthcare stocks are less affected by a weaker economy or a dysfunctional government. Moreover momentum is driven by M&A talk, new products and aggressive fund buying.

The IBB ($212.46) hit a new high today recovering from a $207 low last week. The Five Star Fidelity Select Biotechnology Fund (FBIOX $175.47) up 58% YTD is sure to levitate to new highs today at the close. Here are the Rayno Biopharma top 5 winners YTD, but almost all stocks are winners:

Astex (ASTX) up 312% YTD after Otsuka bid of $886M.

Albany Molecular (AMRI) up 243% YTD, a CRO value stock.

Pharmacyclics (PCYC) up 239% YTD on promising pipeline and upgrades.

Seattle Genetics (SGEN) up 189% , broad pipeline of antibody drug conjugates.

Regeneron (REGN) up 182% YTD, revenues ramping on EYELEA backed up by broad pipeline.

Our recommendations have not changed since year end 2012: all portfolio stocks are strong holds but maintain a 10% cash position. Despite the upward trajectory and apparent frothiness of this bull market it is hard to call for a correction. If we see any trends that portends secular changes we hope to be the first to call it. Pricing will be key. Our only clue of excess thus far is a few mid-cap stocks with multi-$B market caps yet lacking clinical data support. For now, short biotech stocks at your peril.