Large Cap Biopharmaceuticals: Updates on #ASCO24 Week…Update-2

Update-2 Biopharma rally moves to SMID caps as momentum picks up ADPT, NVAX, TWST etc XBI over $93.  Large caps steady with REGN over $1000.

• POST ASCO large cap core portfolio picks: ABBV, AZN, LLY, MRK, REGN. VRTX.
• Pfizer had good results but the stock could not break $30 so my calls with strike price at $30 looks iffy. I’ll hold the stock for a while with a yield of 5.83%.

Update-1 6/4 930 am Biopharma stocks rally on lung cancer data: AZN.MRK,PFE igniting broader biotech rally. Looking for a follow through today.

• IBB up 1.21%,  XBI up 2.57%
• VRTX up 3.26%.

Large Cap BIopharmaceuticals Overview

We provide this data on a quarterly basis to help investors with portfolio management of healthcare stocks. We see these  large cap stocks as the best overall opportunity for investors within the healthcare sector. We gave a general overview of various subsectors last week as kind of roadmap of the components.But large  caps provide top line growth and good value with dividends. But this strategy does require that the investor track news and earnings. As you can see from this data there is a lot of variability of performance over a 12 month period. Our top picks over the past 6 months has been: ABBV, LLY, MRK, REGN and VRTX. As a recent contrarian pick we believe that Pfizer (PFE) performance should turn around due to some recent pipeline deals particularly the acquisition of Seagen for its line of cancer therapies.

As a defensive play healthcare is weighted at about 12% of the S&P 500 not so big considering that Technology stocks (XLK) are weighted at about 30.58% and have gained 2% YTD and about 31 % over one year. The recent applications of AI tools and importance of data management have driven technology and semiconductor stocks to new highs.

Large cap biopharma performance obviously tracks product pipeline and clinical news so we will try to cover important data and the impact on stock prices. 

• The leaders YTD are: LLY up 40.73%, GSK up 20.8%, AZN up 15.84%, MRK up 15.15%, VRTX up 11.91%, REGN up 11.6%.
• Stocks to watch for gains are: Astra Zeneca (AZN), Gilead Sciences (GILD), Pfizer (PFE).
• Sector Baseline: XLV up 5.37% YTD, IBB up down 1.45% YTD, XBI down 0.18% YTD.

Some important news items from the Conference- updated daily

1. GSK cancer drug Blenrup halves risk of death from relapsed refractory multiple myeloma. This is big turnaround for a MM drug that had toxicity and efficacy issues.Plus overall oncology/portfoiio looks transformational. Stock is up over 8% in one month. (But ZANTAC lawsuit weighs on stock)
2. Astra Zeneca (AZN) had two high profile Phase III sessions for lung cancer, an EGFR inhibitor for mutated lung cancer, and an immunotherapy for limited stage small cell lung cancer and one coming up for a CAR-T drug for liver cancer. AZN is up 2.82% in one month. PLUS Astra has ENHERTU has a breast cancer drug that slows progression of breast cancer worsened by hormone therapy.
3. Gilead Sciences (GILD) provides Phase 2 update of First Line treatment of upper GI cancers with combo antibody and Chemotherapy. Also presents data from Third-line colorectal cancer.
4. Expectations are high for Pfizer for its cancer drug LORBENA targeting a specific lung cancer (NSCLC) gene, anaplastic lymphoma kinase (ALK). 60% of advanced patients were alive without their disease advancing.after 5 years. But the big Pfizer news comes from ADCETRIS ADC drug from its major acquisition of Seagen for example for Refractory diffuse large B cell lymphoma. Pfizer sales of oncology are $3.55B and is a major growth area for the Company. Pfizer is our top contrarian pick with this quarter after disappointing COVID vaccine sales in 2023.
5. Update 6/3 1P Merck releases Ph2 b 3 yr data for mRNA with Keytruda reduces risk for Melanoma Recurrence -Free survival and distant Metastases following complete resection.

Lung cancer is the leading cancer death with 125,000 cases each year, followed by colorectal and pancreatic. Lung cancer tends respond better to newer drugs such as immunotherapy because its tumors have more mutations that are easier to track.

LONG: ABBV, AZN, GILD, LLY,  MRK, PFE, REGN, VRTX.