Update-1 …1/7/25… Biopharma stocks rally as MegaCap TECH takes a breather with XLK down 2% to 234 and XLV up 0.5% to $139.71 but some large cap biopharmas moved up more than 1%; AMGN, JNJ, LLY, MRK,REGN, RHHBY, VRTX. Biotech pure play ETFs moved up as well: IBB up 0.8% , XBI up 0.72%. There are several big 2%+ movers among our SMID Trading List: BBIO, DNLI, EXEL, NVAX, and RZLT. But CorMedix (CRMD) was up 29.89% to $10.30 on preliminary Q4 results with showed good sales growth or its DefenCath dialysis product.
Vaccine stocks came off the bottom with good gains of 10%: BNTX, MRNA,NVAX with bird flu and COVID in the news.
The market was focused on a climbing 10 yr.Treasury Yield which hit 4.683 % and higher yield gap with the 2 year which was about 4.27%. The NASDAQ as down 1.89% and the S&P 500 down 1.11%. Higher interest rates are not good for small caps as you can see with the IWM down over 7% in one month.
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A Pivotal Month for Biotech and Health Science Stocks
- The negative sentiment for healthcare was triggered in part by the fallout from the UNH Executive murder. XLV flat over one year.
- A seasonal bounce is favored for SMID biotechs because of the “January effect” and investment banking Conferences.
- We need help from small caps and sector rotation to defensive sectors from strong Infotech.
Have you been spending too much time on biotech and healthcare investing? If you are then maybe your portfolio is underperforming the S&P 500 and even a 60/40 balanced portfolio. The healthcare sector is lagging over the past year and recent quarter with the XLV flat for 2024 and down over 4% for the recent quarter whereas the S&P 500 is up 24% over one year and technology stocks are doing even better up about 25% and financial sector stocks up over 13% in the recent quarter and 45% over one year. Keep in mind that the Healthcare sector is weighted only about 12% in the S&P 500 whereas the technology sector is weighted over 30%. Communication and Infotech stocks returned over 30% in 2024. Now some market strategists are recommending to get more defensive by investing in healthcare an obvious laggard so we may see a bounce in the coming weeks from the JPMorgan Healthcare Conference and earnings reports rom large cap Biopharmaceutical and MedTech companies. So over the next two weeks we will post updates of potential trades in SMID cap biotechs from our Focus Trading List as well as news that may influence your allocation to healthcare stocks.
In our latest update last week we gave a brief summary of stocks we own and track. There are many winners among the SMID Life Science stocks and we want to focus on these trades as they are likely to regain momentum. SMID biotechs bounced with all tracking ETFs up: ARKG, IBB, XBI. Select Winners over 12 mos. from our trading list: ADPT up 39%, CPRX up 25%, CRMD up 119%, EXEL up 41%, GH up 21%. NTRA up 165%, PTGX up 69%, SUPN up 32%, TWST up 35%, VCEL up 62%, VCYT up 50%. Keep in mind that the SMID Life Science group has been very weak over the past month with the XBI down 7% at $92.19. We frequently check the momentum ETF iShares MSCI USA Momentum factor (MTUM) for market direction and it is up over 38% in one year but down 1.86% in one moth. The sector weightings are over 20% in technology and financial services but only 8.16% in healthcare.
Review previous posts on Life Sciences Playbook.
- Focus on large cap biopharmaceuticals with dividends for core portfolio.
- Rebalance with large cap MedTech: ABT, BDX, SYK.
- Trade SMID cap life science stocks.
So here are the key tracking ETFS for MOMENTUM in Life Sciences:
| 4/8/24 | P 1/5/25 | % 12m | %1m | RSI | |||||||||||||||||||||
| ArkGenomics | ARKG | 35.28 | 32.81 | 16.22 | 23.18 | -29.35 | 26.54 | -16 | -0.45 | 61 | d 40.9 | ||||||||||||||
| iShares BIO | IBB | 133.77 | -1.89 | 135.21 | -2.48 | 135.23 | -0.7 | -4.34 | 47.3 | d 149 | |||||||||||||||
| SPDR Biotech | XBI | 86.99 | 14.75 | 90.39 | 87.62 | 5.57 | 83.49 | -6.51 | 91.28 | 2.23 | -1.95 | 47.5 | d 103.5 | ||||||||||||
SMID Life Science Trading List-revised 1/5/25
| u=up | |||||||||||||||||||
| f=flat | |||||||||||||||||||
| COMPANY | TICKER | H=high | |||||||||||||||||
| P | P | % | P | % | % | MCAP | RSI | Trend | P/cash | ||||||||||
| P 1/20/23 | Initial | 2/4/23 | 12/24/23 | YTD % | 4/8/24 | % | 1/5/25 | 12 mos | MTD | $B | u,f,d H | ||||||||
| Adaptive BiioTech | ADPT | 4.11 | 5 | 2.6 | -46.94 | 7.2 | 59.3 | 14.3 | 1.24 | 65 | u 7.2 | 5.08 | |||||||
| Avidity Sciences | RNA | new | 7/1/24 | 25 | 30.5 | 219 | -20.7 | 3.56 | 35 | d 55 | 2.24 | ||||||||
| Bridge BIO Pharm | BBIO | new | 11/30/24 | 27 | 28.12 | -25.71 | 5.79 | 5.3 | 55.86 | f 30.29 | 13 | ||||||||
| Catalyst Pharma | CPRX | 16.1 | 16.58 | -10.86 | 14.89 | 11.42 | 21.31 | 27.91 | -1.84 | 2.52 | 47.3 | f 23.11 | 5.69 | ||||||
| CorMedix | CRMD | 3.9 | 5.31 | 41.22 | 8.18 | 129 | -16.2 | -0.49 | 38.18 | d 13.85 | 10.73 | ||||||||
| Crenetics | CRNX | 42.12 | 18.38 | 53.15 | 52 | -6 | 5.08 | 45.95 | d 62.46 | 5.89 | |||||||||
| CRSPR Therap | CRSP | 49.61 | -25 | 55.27 | 63.67 | 56.63 | 53.91 | -13.88 | 41 | -34.43 | -19.95 | 3.48 | 40.58 | d 90.62 | 1.79 | ||||
| Cryoport | CYRX | 21.75 | -42.34 | 25.24 | 16.09 | -7.26 | 16.38 | 5.75 | 8.49 | -43.77 | 14.11 | 0.446 | 49.95 | f 19.93 | 1.64 | ||||
| Cytokinetics | CYTK | 31 | 65.34 | -21.74 | 49.36 | -43 | -4.17 | 5.88 | 43.63 | f 85.60 | 5.81 | ||||||||
| Denali | DNLI | 22 | 19.21 | -9 | 21.26 | 4.57 | -11 | 5.88 | 43.63 | d 25 | 5.7 | ||||||||
| Exelixis | EXEL | 22.25 | 23.75 | -1.21 | 33.97 | 43 | -3.66 | 9.7 | 63.7 | u 36.45 | 8.17 | ||||||||
| Geron | GERN | 3.19 | 9.24 | 3.22 | 2.29 | -5.37 | 3.79 | 79.62 | 3.57 | 77.6 | -9.62 | 2.16 | 42.67 | f 4.65 | 6.26 | ||||
| Guardent Health | GH | 11/6 | 25 | 33.76 | 33 | -5.65 | 4.43 | 59.53 | u 38.01 | 4.44 | |||||||||
| Ilumina | ILMN | new* | 10/4/24 | 143 | 136 | 7.27 | -3.26 | 22.4 | 51 | f 136 | 23.86 | ||||||||
| Natera | NTRA | 60 | 91.66 | 46.33 | 167.6 | 183 | -0.93 | 22.1 | 70.96 | u 167 | 25 | ||||||||
| Pacific Biosci | PACB | 11.29 | 55.68 | 11.58 | 8.59 | 5 | 1.47 | -85 | 1.99 | -78 | 8.74 | 0.58 | 47.22 | f 9.81 | 1.28 | ||||
| Novavax | NVAX | 3.67 | – | 8.85 | 81 | 5.23 | 1.46 | 44.9 | f. 16 | 1.59 | |||||||||
| Protagonist Thera | PTGX | new | 12/12 | 41 | 39.57 | 75.5 | -4 | 2.36 | 47.64 | f 46.2 | 5.11 | ||||||||
| Quidel-Ortho | QDEL | new | 9/16/24 | 44 | 46.66 | -35.73 | 16.48 | 3.25 | 56.33 | u 62 | 22.62 | ||||||||
| Rezolute | RZLT | 7/8/24 | 4.25 | 5.24 | 424 | -2.06 | 0.303 | 56.71 | f 5.72 | 2.85 | |||||||||
| Roivant | ROIV | 11.4 | 11.03 | -1.78 | 11.69 | 7.64 | -3.55 | 8 | 50.41 | f 13 | 1.53 | ||||||||
| Supernus | SUPN | 40.3 | 12.3 | 41.61 | 29.23 | -18.05 | 30.07 | 3.9 | 36.92 | 32.76 | -0.3 | 2.04 | 60.97 | f 37.30 | 5.12 | ||||
| Tempest AI | TEM | new | 7/10/24 | 52 | 38.25 | -4.97 | -32 | 6 | 6.73 | d 79.49 | 14.42 | ||||||||
| Twist Biosci | TWST | 18 | 3.76 | 34.03 | 31.54 | -14.53 | 47.33 | 45.5 | -6.48 | 2.81 | 52.8 | f 4.97 | 10.65 | ||||||
| Vericel | VCEL | 31 | 34.75 | 31.93 | 46.05 | 29.32 | 57.6 | 69.8 | -1.27 | 2.9 | 62.87 | u 58.14 | 25 | ||||||
| Veracyte | VCYT | 24.89 | 39.43 | 26.67 | 28.27 | 19.13 | 39.6 | -29.81 | 41.91 | 61.25 | -4 | 3.25 | 66.6 | u 44.13 | 12.28 | ||||
| Wave Life Sci | WVE | new | 10/26 | 14.45 | 13.51 | 161.8 | -3.77 | 2.09 | 49 | f 16.44 | 6.72 | ||||||||