11/18/21…UPDATE. 230p EDT Life Science Stocks Lag Techs and Semis..

Major Indices are flat.

Small cap stocks have lost momentum in a market that favors big tech and new themes like digitalization of the economy, EVs and the metaverse. It is “risk-off” for speculative life science stocks. The ARKG is near 52 week lows at $69 and the XBI is at $122 near 52 week lows at $118. Big losers today are PACB, QDEL,TDOC and VIR. Not even the $3.3B acquisition of Dicerna (DRNA),an RNAi therapeutics play, by Novo Nordisk can spur the sector. Small cap ETFs are down under 1% : IJR and IWM.

Another RNAi therapeutic stock Arrowhead Pharmaceuticals (ARWR) is up 10% to $70. But the stock is down 10 pts YTD in a choppy pattern


Looking for Growth in Small and Mid-Cap Life Science Stocks

  • 2 out of 3 picks show outperformance.
  • Speculative biotech stocks like gene therapy need breakthrough clinical trial results.
  • Identified additional speculative small mid-cap picks.

In May of 2021 we introduced you to three Mid-cap Life Science stocks that had good growth and M&A potential. 2021 is an unusual year for biotech with a “blow-off” February high in speculative small caps as can be seen with several ETFs like the XBI which peaked around $175 followed by choppiness and now trying to settle at the lows in the $125 range. All of our picks were favored by analysts because of unique technology and growth potential.All had characteristics of “momentum” stocks. We can’t go into the details of of why the speculative bubble collapsed but we thought small and mid-caps would return to favor by the end of Q4.

All of these stocks are volatile.

Cryoport, Inc. (CYRX) is our best pick of the three up over 50% since May because of EPS and top line sales growth. It remains a hold but the stock has recently been weak because of dilution from a $350 M Convertible Debt Offering.

CRSPR Therapeutics (CRSP) is our worse pick down about 12% since May as clinical trial results have not lived up to the potential of gene therapy. We are still long but have cut back our position. Most gene therapy stocks are near their lows of the year. We did make money trading  EDIT and MGTX. Intellia Therapeutics (NTLA) is the outperformer in the group down 2.9% in six months but still up 139% YTD.

Veracyte (VCYT) is a unique genomic diagnostics Company focused on cytopathology for cancer, thyroid and lung diseases. The stock is up over 35% in six months albeit in a choppy stock pattern. Recent financial results showed good revenue growth  and the acquisition of HalioDx a lung cancer nasal swab test.

======Note: if you would like timely updates on these companies we suggest  you put your portfolio picks on Seeking Alpha. ======

Long all stocks mentioned.

Company Ticker P P Revs MCap P/B Recom Perform Perform
5/21 11/13 $M $B 6 Mo % 1 Mo %
Cryoport CYRX 51 76.93 169 3.63 5.48 1.5 52.88 13.38
CRISPR Therap CRSP 124 88.93 902.4 6.98 2.7 2.1 -11.95 -8.1
Veracyte VCYT 36 48.15 157.5 3.59 3.34 2 36.79 9.81
More speculative
Pacific BIoscience PACB 26.11 27.32 121.6 5.61 21 2.4 22.51 13.5
Quidel QDEL 125 143.68 2 6.72 4.24 2.5 23.33 3.89
Teledoc TDOC 136.4 1.86 22.4 1.36 2.3 2.8 0.29
ARKG 73.42 0.3 0.3
IJR 119.47 9.56 7.59
IWM 239.5 11 7.61
XBI 126.54 3.31 1.22

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