Update-2 …4/6 In volatile end of day trading with Tech stocks and the NASDAQ hit hard down 2.2%, healthcare stocks were winners with the XLV up 1.5%. Other sector winners were staples, energy, real estate and utilities. As one pundit put it, ” the FED is intent on wealth destruction” to curb inflation. The S&P500 was down only 0.98%.

  • The equal weighted biotech XBI held current levels at $93.33 despite 1.4% loss in the IWM Russell 2000 ETF.
  • Large cap biopharma were winners on a green screen day: AMGN, AZN, LLY, MRK, PFE, REGN etc. but the IBB was flat at $132.48.
  • COVID vaccine stocks were down on oversupply concerns : BNTX,  MRNA, NVAX.

Update-1 4/6 10a …”rate hikes are coming, rate hikes are coming….etc” ok we get it as sell-off continues at opening;  macro gloom casts a pall over markets. FED minutes later today, balance sheet reduction underway. NAZ down 2.46%, S&P down 1.3% at 10:0a EDT.

  • Large cap biopharma green PFE ,ABBV, MRK, REGN even SGEN, VRTX.
  • XBI down 1.9% to $91.44, IWM down 2%; sold ARKG yesterday.
  • Healthcare ok CVS, JNJ, UNH, XLV up a tad at $137.84.
  • XLE up 1.7% at $77+.


Good Entry Point for Biotech Stocks

  • Seasonality and technicals favor entry level portfolio positions for biotech.
  • Trading in speculative small cap biotechs is picking up.
  • ARKG and XBI are bellwethers.

Life science and biotech stocks had a good week with most well known ETFs up 3-4% for the week and off recent bottoms. It looks like bottom fishing with a boost in sentiment. Technicals are looking much better as well. If we get any pick-up in M&A, small/mid cap stocks should move up toward the seasonal rally with the ASCO Conference in June.

Despite a backdrop of higher FED fund rates, geopolitical concerns and higher commodity prices fueling inflation, stocks edged higher late Friday. The market was helped by the country’s jobless rate falling to 3.6%. The market is still focused on energy and impact on Russia as the ruble was up 23.2% for the week. Among the many sector winners were real estate, consumer staples, and China.Latin America is very strong. We need a Russell 2000 rally to boost  biotech.

Our portfolio positioning  throughout 2021-22 has been weighted toward  large cap biopharmaceuticals in the following order: ABBV,REGN, RHHBY, VRTX, BMY. Also AZN and MRK look better.

Recently we have added more speculative ETFs as trades the ARKG up 7.28% for the week but down 21.57% YTD. Top five holdings of ARKG are TDOC, EXAS, PACB, CDNA and REGN. We also added a small position in the XBI which holds NTLA, EDIT, AVXL, BEAM and MNKD as top five positions.

Our new spec biotech stock high risk trades are; ADPT, CRSP, DNA, EDIT, SGEN. We sold MDGL too soon in 90s.

Add  a small position in T.Rowe Price Health Sciences Fund (PRHSX) for the longer term.

Biotech ETFs Compared to Funds

4/3/22 4/3
Major ETFs Price YTD % 1 Year % 5 Year % High 5 yr P % week
FBT 153.39 -5.29 -5.17 45.67 186.51 153.39 4
IBB 133.06 -12.82 -12.18 36.11 177.37 133.06 3.82
PBE 63.44 -10.91 -14.73 50 84.86 63.44 3.31
XBI 93.26 -16.7 -31.94 34.5 174.79 93.26 4.06
QQQ 361.85 -9.05 11.49 173.84 408.71 361.85 0.7
XLV 138.07 -2 18.63 85.68 141.98 138.07 1.32
Biotech Funds
FBIOX 16.66 -13 -31.1 -17.33 29.72 16.66 -13.9
PRHSX 96.61 -7.18 -2.14 46.98 117.14 96.61 -7.18
JFNAX 65.12 -3.87 -4.66 30.4 77.12 65.12 -3.87

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