Update-3 ..6/6/25 11:45a.  Green screen rally in SMID biotechs ! TECH stocks strong.

330p EDT: I dont know why the SMID biotechs are taking off today but some of it is ETF buying (XBI) here is a shortlist of big movers we hold that are up 3 % + today:

  • ADPT, ABSI, COGT, CRMD, CYRX,RXRX, EYPT, IMVT, RNA, RYTM, RZLT, TEM, WVE, XNCR etc. If momentum is easing on your speculative pick you might consider lightening up.

UPDATE-2 6/4/25 215p…Merus (MRUS) announces pricing  of pubic offering should raise $300M at $57/sh, stock drops 7.3%. A great deal for the oncology Company to continue development of their  innovative, full-length multispecific antibodies and antibody drug conjugates (Biclonics®, Triclonics® and ADClonics®), initially for head and neck cancer.

2.25P EDT Market update: MOMENTUM slowing with the XBI UP 0.58% at $82.80, ARKG up 2% at $22.50, SMMT down 1.8% at $20.24.

  • Nex-Gen Diagnostics for Precision oncology stocks all up: ADPT 0.9% GH 3% and NTRA 5%. Guardant Health gets FDA breakthrough designation.Natera announces Medicare coverage for Signatera MRD assy.

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ASCO Update-1…3:15p EDT...SMID stocks are almost in a green screen mode with two of our major bullish indicators up; ARKG up 3.5% to $21.66 and XBI up 2.5% to $81.11 helped by dealmaking. Nex-Gen Dx companies in green GH and NTRA.

May 2025 was a Great Month for Stocks but….

  • The S&P 500 is still down over 3% YTD with a lot of volatility among sectors and individual stocks.
  • Tariffs are still a major issue for the global economy and biopharma stocks with complex supply chains.
  • Healthcare stocks normally a safe haven in choppy markets are wracked by politics, policies and pricing.
  • Nex-Gen molecular diagnostics and precision oncology companies will present a lot of new data at ASCO for cancer diagnosis.

Volatility with individual biopharma stocks

Normally we should be relieved that a 6% gain in one month would cool market angst and set the pace for future gains or at least less volatility so let’s focus on a few sectors. Healthcare stocks are down over 3% YTD and that sector is supposed to be defensive. UNH has been the mainstay of healthcare stocks up consistently  over 5 years but you know what happened recently as the stock is now down 1% over 5 years and 40% YTD. BIotech has lost its mojo with the IBB down about 10% over 5 years since the pandemic created a bubble and resultant downdraft that still has barely stabilized. Add tariffs and government directed pricing policies on pharmaceuticals ls to the mix and yet more uncertainty is created. And normally stable growth stocks wi strong product pipelines like Bristol Myers and Merck have their own unique set of issues. I should mentiont a former superstar Company called Regeneron seemingly in free-fall down 49% YTD and at $490 off a ridiculous high in the  $1200s in 2024 ouch !.

Backdrop for biotech: concerns about support from the “slimmed down ” Administration

The Administration has come out of the gate with aggressive cost cutting and deficit reduction actions with “DOGE” which many pundits agree is in the right direction but unfocused and somewhat reckless because of the chaos it created.  For example, lawsuits for unfair dismissals and personnel shortages, The implementation of tariffs are another example of poor execution starting with our “friends” Canada and Mexico then ultimately targeting large companies like Apple. Each week there are more Executive Actions which roil the markets from 90 day extensions of tariffs to a more focused attack on China the major cause for most trade imbalances because of their immense resources and cheap labor. Recently we have seen a few biotech deals like Merck licensing a promising clinical stage drug from a Chinese company 3SBIo. And Nature published several articles on China’ s strategic focus on biotechnology including a summary of scientific publications showing that China was cited in 9 out of 10 top articles.

In previous articles we have expressed concern about radical cost cutting and organizational changes at HHS particularly FDA and NIH. Add to those conflicts, the attacks on Harvard and leading Universities conducting life science and health related research and you should question the long term impact on innovation.  The sheer scope of Administrative actions involving tariffs, immigration, foreign policy, with an inexperienced Cabinet makes it likely that uncertainty will continue. For example, the expanded responsibilities of Marco Rubio. Then there is there is Republican Budget process with major changes expected from the Senate  Why is Trump fighting with everybody all at once?In the words of Sun Tzu “The Art of War ” there is Rule 06-knowing  “when to be fighting  when not to and picking battles wisely”.

Biotech Strategy for JUNE 2025-Looking for Data and Deals beginning with ASCO

Getting back to Biotech investing despite the 6% move in the S&P 500 biotech ETFs and Funds were a bit weak in 2025 (see performance metrics  below.) and down about 4% month to date. Our healthcare and biotech portfolios required a lot of rebalancing but we are ahead of the market due to positions in ABBV, GILD and VRTX and some good small cap trades, despite losses in REGN and UNH. And since healthcare is only about 12% of the S&P 500 it was best to focus on IT and TECH stocks because they are about 30% of the S&P. But as I wrote recently my biotech resources are focused on SMID stocks . This week I was hoping to find trades from ASCO and undoubtedly there will be important breakthroughs but you will need to see it in the MOMENTUM with individual stocks and two ETFs the ARKG and the XBI.

innovation has impacted cancer diagnosis and therapy and data will be be presented y at ASCO are three advanced diagnostic companies utilizing DNA analysis and AI : Adaptive Biotechnologies (ADPT) up 58.8% YTD for MRD assessment I Lymphoid cancers. Guardant Health (GH)up 33% YTD presenting ctDNA data (“liquid biopsy”) for colon cancer, and Natera (NTRA)  don 0.36% YTD, with their SIgnatera cell free DNA assays across 10 different cancer types.

All three of these stocks have strong sales growth, analyst coverage and good RSI. We are long all three and have been trading them over the last 2 months.

ASCO is always a good time to focus on the life science sector because of the impact on diagnosis and treatment of cancer a huge market. So enjoy the week and hope we won’t be too distracted by breaking MACRO news on tariffs.  As of 10:25 am trading the XBI at $80+ is up about 1.7%.

Selected Healthcare and Biotech ETFs and Stocks

Model
PORTFOLIO *
2020 2020 2020 2021 2022 2023 2025 5 yr %
Stock/ETF Ticker Price Wgt Price Price Price Price P
10/25 % 12/31 % Perf 12/31/21 12/31/22 11/23 5/31 %Perf 5yr % % 1 yr H
P YTD 1 mo 2024
iShares NAZ Bio IBB 136 10 151.5 25.7 152.62 130.55 115.53 121.72 -7.93 -9.66 -3.84 150
iShares Russell 2k IWM 163 10 196.4 18.3 222.45 174.36 175 205.07 -7.07 47.64 5.24 245
Merck* MRK 80 10 81.77 -10 76.64 115 101 76.84 -23 -0.24 -9.81 134
United Health UNH 330 15 350.7 27.19 502 530.27 541.21 301.91 -40.3 -0.96 -26.6 630
SPDR S&P Bio XBI 117 10 140.8 48 111.96 83 66.95 79.19 -12 -23.53 -4.53 105.4
Healthcare SPDR XLV 108 25 113.4 14.71 140.89 135.88 126.27 132.64 (3.58) 28.76 -5.67 159.6
T.Rowe Price** PRHSX n/a 5 99.65 n/a 104 89 83.41 74.27 -6.61 -14 -6.5 102.48
iShares U.S MedT IHI 50 10 54.83 65.85 52.57 45.75 61.89 5.87 38.3 3.51 65.09
MedTech* ABT 5 123.5 127.46 109.83 94 133.58 18 40.7 2.16 141
Diversfied MED JNJ 155.21 7.32 4.34 -0.7 170
Tracking Comp
ARK Genomic ARKG 93.26 61.24 28.23 24.1 20.92 -11.77 -14.12 -4.87 31
Direx3X Bull LABU 7.66 2.74 50.29 -43.86 -94.8 -17 152.6
VanEck BIO BBH new 148.34 -5.5 -7.81 -2.79 183.7
FIDO Biotech FBIOX ** 25.18 19.35 16.04 14.39 17.5 -7.3 -23.6 -4.89 22.47
FiDO MEDtech FSMEX 76.15 83.18 60.04 51.64 59.36 0.56 -1.92 1.35 69.41
JanusHendLifeSc JNGLX 64.47 -5.04 2.86 -5.69 82.6
DOW DIA 310 363.32 331.34 343 422.85 -0.62 60.29 4.06 450.94
S&P 500 SPY 379 475 382.41 440 589.35 -3.77 93.67 6.28 613
NASDAQ-100 QQQ 315 397.85 266.33 378.39 519 1.54 122,4 9.18 540
Technology SPDR XLK 128.93 161.97 124.44 179.52 230.9 -0.69 135.7 9.97 243
Top Biopharmas * 2022 11/23 5/31/25 %YTD 1 yr 1 mo. 52 wk h div %
Abbvie ABBV * 161.64 138.59 186.11 4.73 19 -4.61 218 3.53
Amgen AMGN 275 303 288.18 10.57 -4.26 -0.94 349 3.3
Astra Zeneca AZN 68 63.17 72.83 11.07 -4.27 1.56 87.62 2.13
Bristol Myers Sq BMY 71.05 50.61 48.28 -14.64 -2.7 -3.82 63.33 5.14
Gilead Sci GILD * 85.39 75.92 110 19.17 71.79 3.32 120 2.87
Eli Lilly LLY * 447.71 597.71 738 -4.45 -9.5 -17.94 972.53 0.81
Merck MRK * 110.95 101.39 76.84 -22.76 -38.3 -9.81 134.63 4.22
Pfizer PFE * 51.24 29.48 23.49 -11.46 -16.7 -3.77 31.54 7.32
Regeneron REGN * 725 798 490.28 -31.17 -49.45 -18.12 1211 0.72
Vertex VRTX * 289 373.65 442 9.77 -0.23 -13.24 519 0

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