Healthcare Sector Gets Boost from JPMorgan Conference-Large Caps Lag Except CELG
Most life science stocks were quiet today after a strong showing during the JPMorgan Healthcare Conference Jan. 7-10. The biotechnology sector was up over 35% in 2012 and usually this trend is carried through January. We have learned to be cautious about new buys in January as enthusiasm can become unbridled during this well attended and publicized Conference with many companies announcing deals and clinical data. We are reviewing notes from Company presentations to include new ideas in our Life Science Portfolios. We were well psitioned as many of our stock picks have hit new highs. Our only significant miss was not adding Celgene (CELG $96.7) which had a huge move for a large cap up 17.8% over five days. The stock took off immediately after a bullish presentation at 8a PST on Monday January 7. EPS for Celgene is expected to exceed 20% over the next 5 years with three major drug franchises in hematology, oncology and immunology. It is interesting to note that other large biotechnology stocks were flat over the past week such as Amgen (AMGN) , Biogen (BIIB), and Regeneron (REGN). A big winner in 2012 Gilead (GILD $77.93) was up 2.9% over the past week.
Within the Rayno Biopharmaceutical Portfolio the big winners over the past week are: Albany Molecular (AMRI $5.95) up 8.6%, Astex (ASTX $3.30) up 11.5%, Immunogen (IMGN $14.8) up 9.3%, and Seattle Genetics (SGEN $27.70) up 10.8%. Many small and mid-cap biopharma stocks are green today so it looks like good follow-through on the smaller cap trend.
The Rayno Life Science Diagnostics and Tools stocks had a good week especially beaten up stocks like Alere ALR $20.95), up 10.55% and Cepheid (CPHD $35.74) up 9.2%. Sequenom (SQNM $4.35) took a 17% hit possibly due to perceived competition by Verinata sold to Illumina (ILMN) for $450M. SQNM can be added at this level. Quidel (QDEL $21.55) had a huge move up 19% over one month as new products should spur 2013 growth especially Flu testing but was flat for the week. Our top pick in the device area is Cardiovascular Systems , Inc.(CSII $14.64) up 16.5 in one month, an emerging growth Company for minimally invasive treatment of PAD (Peripheral Artery Disease) with potential revenues exceeding $100M in 2013.
Looking at ETFs for trend clues the IBB ($145.6%) is up 2% over 5 days and 6% YTD but below October 2012 highs of $148.54; The XBI ($96.18) is 4% for the week and 9.4% YTD and but near its its 2012 highs of $96.61. Its is interesting to note that the IBB ($2.15B in assets) is still holding larger cap winners like Amgen, Biogen, Gilead, and Regeneron while the smaller XBI ($692M in assets) has rejiggered the portfolio to smaller caps like Dynavax (DVAX) , Dendreon (DNDN) and Cepheid (CPHD).