My biotech picks were published in Genetic Engineering News (GEN) in February 2008. My strategy was to allocate 25% in one ETF (XBI), 50% in large caps and 25% in smaller cap biotechs. My proprietary system is based on technicals, core technology and company financials. Despite all the volatility in 2008 with declines of 34-40% for the major indices my bioportfolio had a gain of about 9% due to a 75% weighting of large and mid cap biopharmaceuticals. A huge gain of 30% as of August 15, 2008 was pared during the 4th Quarter meltdown. Microcap stocks with the exception of MITI (MicroMet) suffered large losses and 2009 should be a difficult year for companies with weak balance sheets. My 2009 forecast will be published in the February GEN.
Among the big winners in the portfolio were:
- AMGN Amgen up 23%
- DNA Genentech up 18%
- CEPH Cephalon up 18%
- GILD Gilead up 14%
- CBST Cubist up 34%
- MATK Martech up 8%
- MYGN Myriad Genetics up 65%
- VPHM Viropharma up 45%
- XBI ETF was down 2.5%
Some of my long term holds BDX BIIB ELN and GENZ were down significantly. The iShares Biotech ETF symbol IBB was down about 10% for 2008 much better than the NASDAQ composite down 40% YTD. Read the complete story, here.
The main drivers of this market as reviewed in the article were M&A, product announcements, revenue and value.
Here are some of the picks:
| Stock | Company | Weighting | 2/1/08 | 8/15/08 | YTD return % | 12/31/08 | YTD return % |
|---|---|---|---|---|---|---|---|
| XBI | ETF S&P Bio | 25% | 55 | 69 | 25.5 | 53.6 | -2.5% |
| Large Caps Buys | 50% | 9% | |||||
| AMGN | Amgen | 47 | 65 | 38.45 | 57.75 | 23% | |
| CELG | Celgene | 59 | 75.9 | 28.6 | 55.3 | -6.3% | |
| CEPH | Cephalon | 65 | 77 | 77 | 18.5% | ||
| DNA | Genentech | 70 | 98.25 | 40.35 | 82.9 | 18.4% | |
| PFE | Pfizer | 22 | 20 | -9.3 | 17.7 | -19.5% | |
| Mid/SmallCap buys | 25% | 3% | |||||
| ALNY | Alnylam | 30 | 34.75 | 15.8 | 24.7 | -17.5% | |
| CBST | Cubist | 18 | 23.55 | 30.8 | 24.2 | 34.2% | |
| CRA | Celera | 15 | 14.5 | -3.33 | 11 | -26% | |
| ELN | Elan | 26 | 10 | -61 | 6 | -77% | |
| EPIX | Epix | 3 | 1.92 | -36 | 1 | -66% | |
| ISIS | Isis | 15 | 19.1 | 27.2 | 14.2 | -5.5% | |
| MATK | Martech Biosciences | 28 | 37.7 | 34.7 | 30.3 | 8.25% | |
| MYGN | Myriad Genetics | 40 | 65.5 | 63.75 | 66.2 | 66% | |
| SGEN | Seattle Genetics | 9 | 12.15 | 34.9 | 8.95 | -1% | |
| VPHM | ViroPharma | 9 | 13.9 | 54.5 | 13 | 45% | |
| Return YTD | +30% | 5-9% | |||||