Concerns about another Middle East war and a spike in oil prices waned a bit today but many “undertoads” remain such as weak economic data, taper talk, Q4 earnings and a slowdown in housing. So yesterday’s grim warnings about a strike against Syria seemed like a good excuse for “fast money” types to sell stocks. With stocks up 15-19% YTD and more depending on the sector it was time to have some dry powder and take profits.
Life science stocks are mainly up today as of mid-day trading but the major ETFs are in the green with the XBI ($118.79)leading up 1%.The XBI has top holdings in many mid-caps quite different from other funds and ETFs such as : Intermune (ITMN), Alnylam (ALNY), Aegerion (AEGR) and Celldex (CLDX) not familiar names to the average trader. For example Fidelity Select BiotechFund enter (FBIOX $159) up 44% YTD, still has the top large caps as its top five holdings: GILD, AMGN,CELG, BIIB, and VRTX.
http://idsn.com/where-else-can-you-find-us Astex Pharmaceuticals (ASTX $6.67) up 21.72% a Rayno Portfolio pick since 12/27/11 at $1.63 soared with Phase 2 data showing clear activity with their drug SGI-110 for patients with AML and MDS.SGI-100 is a novel small molecule DNA-hypomethylating agent administered as injection. The overall remission rate is 17/67 or 25%. Astex has six products in its clinical development portfolio and unlike many small cap biopharmaceutical companies has forecasted royalty revenues of $63M for 2013.
Seattle Genetics (SGEN) was up almost 2% after being put on Cramer’s Biotech Buyout list with Biomarin(BMRN) and Medivation (MDVN). We will have more data on a potential big pharma buyout list.
We have not made any changes in our Life Science Portfolios and have recently urged investors to stay the course without new buys while having 10% cash. Over the past month many Rayno Life Science stocks have hit new highs showing the importance of :
- A complete portfolio of biotech stocks.
- A diversified portfolio including diagnostics and tools.
- Use of ETFS and Fidelity Biotech Fund (FBIOX) to balance holdings.