Performance %: March and YTD
FBT -0.83, +15.87
FBIOX -2.43, +15.79 * Fidelity ahead of IBB in 2017
QQQ +1.04, +11.73
XBI -2.82, +17.15
XLV -1.9, +7.86
Notable Rayno Portfolio Picks %: March and YTD
ABBV +2.9, +4.08
AMGN -8.95, +12.22
BLUE +7, +47.33
FMI +13.85 +82.2
HOLX +3.18, +6.06
RHHBY -1.2, +12.27
Laggards BMY, BIIB, GILD
( see also IBB and XBI above)
Biotech stocks traded off double highs reached in March and off lows at the end of January.We are trading near one year highs. All time highs were reached in July 2015.
Vertex (VRTX) Soars and Does the Heavy Lifting
Biotechs Eke Out Gains on Vertex News
Biotech Sector Survives Tweet Storms For Now
Vertex Pharmaceuticals (VRTX) soared over 20% to $108 on released Phase 3 clinical data for their cystic fibrosis (CF) drug. Two phase trials for its combo drug of tezacaftor (VX-661) and ivacaftor were viewed favorably by traders and analysts and the Company plans to seek approval in Q3. CF is a rare life shortening genetic disease that affects about 75,00 people in North America, Europe and Australia that causes progressive lung damage.
The study met primary endpoints with statistically significant improvements in lung function who have certain mutations in the cystic fibrosis membrane conductance regulator (CFTR) gene. Across both studies the combination drug was well tolerated.
- Major biotech ETFs were lifted by the Vertex news with IBB up 0.83% and the XBI up 0.63%.The Fidelity Biotechnology Portfolio (FBIOX) held a 2.55% position of VRTX in its Fund and was up 0.79% today and 15.39% YTD.
- Selected large cap biopharmas moved up: REGN up 3.03%, ALXN up 1.85% and mid-caps: ALNY up 1.44%, RDUS up 1.27%, GWPH up 1.06%.
- Small caps have been aggressively traded over the past month with huge moves up and down.
We are in a slow technical recovery from the mini-selloff of March 21 triggered during the last Trump Tweet on drug prices but before the AHCA vote which failed last Friday. The technical support for the IBB is at the $290 level and the triple top since last summer is at the $300 level. Although drug pricing concerns have always loomed as a major negative for biotech stocks the approval of “repeal and replace “ACA could have been much worse because of more expensive coverage and fewer patients. There is a considerable difference of opinion as to whether Trumpcare would have been better for the biotech sector but for now it looks like we are better off without the disruption and uncertainty.
Here are some preliminary stock trends to consider:
Healthcare stocks are stable to up since last thursday’s losses: AET, ANTM,CI. The broad-based XLV is off YTD highs of $76 but is recovering from last weeks’ downtrend an up 8% YTD.Watch last Thursdays’ low of $68 for the XBI to gauge speculative appetite. We will look at data in the coming months after Q1 earnings to assess post-AHCA trends. The XPH S&P Pharmaceutical SPDR ETF is up 3.96% over 5 days recovering frequent losses.
So we are still in a trading range with the biotech leading most sectors up 15-18% YTD. Semiconductors are a strong second up 11% and the QQQ is up 11.6%. Trading and stock picking even with small caps is in a very favorable environment with good speculative action.It is always good to see big moves on clinical data a sign of healthy market.