2/28/25. Upate 2 2/28…Market recovers despite heated Trump/Zelensky exchange. Healthcare still leads the way but importantly buys come into NAZ stocks in last hour up 1.67%. Some nibbles on SMID lifescience stocks with XBI up 1.85% to $88.71: CPRX, CRNX, NVAX, PTGX, RNA, VCEL. NEW buy and added to Life Science Trading Llst Solid Biosciences (SLDB) at $5.60.
2/27/25 Update-1….Tech stocks and NVDA spark sell-off. Momentum is gone with MTUM down over 1% today and down 4.76% over five days. QQQ down 2.78% today and 6.88% over five days. SPY down 4.15% over 5 days. So how well did healthcare and biotech stocks do over past five day period?
- The XLV held up well today; down a fraction closing at the $147 handle. Flat over 5 days.
- The mid-cap IBB was down over 1% to $135.48 today and down 2.83% over past five days.
- The XBI was down 1.35 today to $87 level and down 6% over 5 days.
The good news is UNH up 1.07% trying to stop the 13.79% slide over the past month caused by investigations about its Medicare Advantage billing codes and revenue from Medicare procedures.
The bad news is the daily update on more tariffs.
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Biotech and Healthcare Stocks Stay Strong
- New government policies such as tariffs create uncertainty and inflation remains a risk to the market.
- The best healthcare sectors for 2025 are large cap MedTech and Biopharmaceuticals.
- Innovation will drive market gains: AI, software and new products from neuroscience.
Many analysts are feeling better about the prospects for healthcare stocks in 2025. The healthcare sector has lagged over the past 3 years as the AI theme and technology has dominated the market. But after recent earnings from most large cap biopharma companies the prospects look good for 2025 so they upgraded the sector. So with all the uncertainty regarding TRUMP 2.0 policies the consensus seems to be that the demand for healthcare products and services will remain stable especially in a weaker economy. But there are issues like drug pricing that are still being impacted by the IRA (InflationReduction Act) and cuts in government spending could impact medical research and FDA approval of new drugs and devices.
The Administration has not changed FTC policies from Biden regarding M&A so no expectations for a pick-up in deal flow. We also need to look for changes in healthcare policies from RFK Jr. especially with a vaccines focus now on a measles outbreak in Texas.
We have been following Life Science stocks by major sectors: Biopharmaceuticals, MedTech and Devices, and Tools/Diagnostics. The leading sector YTD is Large Cap biopharma but within that group there is a lot of variability in performance from the best Abbvie to the worst Merck shows the importance of following your stock portfolio on a weekly basis especially during quarterly earnings season. We are currently focused on trading SMID Cap biopharmas and MedTech thesector is up about 10% YTD as the technology underpinning devices shows break-out potential and procedures are recovering from the pandemic.
Here are some takeaways from the data below:
- A strong sector YTD is large cap MedTech with the IHI up 10% YTD. For example we hold Abbott (ABT) and Interaciive Surgical (ISRG), We recently recommended Becton Dickinson (BDX) with a business spin-off coming up.
- Note that Small Cap ETFS are lagging the market wit the Russell-2000 (IWM) down 1.8% over six months. If small caps pick up momentum then SMID biotechs will do better as tracked by ARKG and XBI.
- All of our large cap biopharma stocks look like strong holds with modest growth and dividends. For new positions we recently recommended oversold Merck and JNJ is also poised for a better year.
- With SMID caps we have developed a trading list following a momentum strategy. See previous posts.
- Growth areas for new products are: diabetes/obesity, autoimmune and neurodegenerative diseases and robotics.
Biotech and Healthcare Sector Snapshot
| 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 | 2/23 | %Perf | % | % | 1 yr H | ||||
| P | YTD | 1 mo | 2024 | ||||||||||||
| iShares NAZ Bio | IBB | 136 | 10 | 151.5 | 25.7 | 152.62 | 130.55 | 115.53 | 138.91 | 5.07 | 12.86 | 2.06 | 149.15 | ||
| iShares Russell 2k | IWM | 163 | 10 | 196.4 | 18.3 | 222.45 | 174.36 | 175 | 217.8 | -1.31 | 33.35 | -0.97 | 242.4 | ||
| Merck* | MRK | 80 | 10 | 81.77 | -10 | 76.64 | 115 | 101 | 89.5 | -10 | -3.4 | -7 | 132.96 | ||
| United Health | UNH | 330 | 15 | 350.7 | 27.19 | 502 | 530.27 | 541.21 | 466.42 | -7.8 | 54.74 | -11 | 625.25 | ||
| SPDR S&P Bio | XBI | 117 | 10 | 140.8 | 48 | 111.96 | 83 | 66.95 | 91.7 | 1.82 | -5.72 | 1.31 | 104.18 | 1/31/21* | |
| Healthcare SPDR | XLV | 108 | 25 | 113.4 | 14.71 | 140.89 | 135.88 | 126.27 | 146.43 | 6.44 | 41.57 | 2.76 | 157.2 | ||
| T.Rowe Price** | PRHSX | n/a | 5 | 99.65 | n/a | 104 | 89 | 83.41 | 83.04 | 4.41 | 6.59 | 0 | 102.48 | 8/29/21* | |
| iShares U.S MedT | IHI | 50 | 10 | 54.83 | 65.85 | 52.57 | 45.75 | 64.36 | 10.09 | 40.7 | 4.08 | 65.09 | 12/26/21 | ||
| MedTech* | ABT | 5 | 123.5 | 127.46 | 109.83 | 94 | 134.92 | 19.28 | 54.28 | 15.52 | 134.92 | ||||
| Diversfied MED | JNJ | new | 162.3 | 12.23 | 8.25 | 9.55 | 168.46 | ||||||||
| Tracking Comp | |||||||||||||||
| ARK Genomic | ARKG | 93.26 | 61.24 | 28.23 | 24.1 | 26.94 | 13.62 | -27.46 | 11.74 | 32.96 | |||||
| Direx3X Bull | LABU | 7.66 | 2.74 | 91.18 | 1.79 | -92.48 | 10.39 | 174.12 | |||||||
| FIDO Biotech | FBIOX | ** | 25.18 | 19.35 | 16.04 | 14.39 | 20.11 | 6.4 | -12.3 | 6.5 | 22.47 | ||||
| FiDO MEDtech | FSMEX | 76.15 | 83.18 | 60.04 | 51.64 | 64.88 | 4 | 3.02 | -3.11 | 69.41 | |||||
| JanusHendLifeSc | JNGLX | 71,57 | 5.42 | 14.18 | 3.37 | 82.6 | |||||||||
| DOW | DIA | 310 | 363.32 | 331.34 | 343 | 434 | 2.03 | 49.8 | -0.52 | 450.94 | 12/4 | ||||
| S&P 500 | SPY | 379 | 475 | 382.41 | 440 | 600 | 2.36 | 79.9 | -1.01 | 613 | |||||
| NASDAQ-100 | QQQ | 315 | 397.85 | 266.33 | 378.39 | 526 | 2.91 | 128.48 | 0.25 | 539 | |||||
| Technology SPDR | XLK | 128.93 | 161.97 | 124.44 | 179.52 | 234.87 | 1.07 | 136.19 | -0.19 | 242,16 | |||||
| Top Biopharmas | * | 2022 | 11/23 | 2/23/25 | %YTD | 5 yr % total | 1 mo. | H | div | ||||||
| Abbvie | ABBV | * | 161.64 | 138.59 | 202.08 | 13.72 | 112.81 | 17.07 | 203.9 | 3.25 | |||||
| Amgen | AMGN | 275 | 303 | 303 | 16.26 | 36 | 10.26 | 339 | 3.14 | ||||||
| Astra Zeneca | AZN | 68 | 63.17 | 74.22 | 13.19 | 51.66 | 11.44 | 87.62 | 2.09 | ||||||
| Bristol Myers Sq | BMY | 71.05 | 50.61 | 55.83 | 1.29 | -14.93 | -2.12 | 60 | 4.4 | ||||||
| Gilead Sci | GILD | * | 85.39 | 75.92 | 109.96 | 19 | 57.75 | 8.28 | 109.95 | 2.87 | |||||
| Eli Lilly | LLY | * | 447.71 | 597.71 | 873.68 | 13.17 | 515 | 17.69 | 960 | 0.69 | |||||
| Merck | MRK | * | 110.95 | 101.39 | 89.5 | -10 | 13.91 | -7 | 132.9 | 3.62 | |||||
| Pfizer | PFE | * | 51.24 | 29.48 | 26.3 | -0.87 | -22.4 | -1.28 | 31.39 | 6.54 | |||||
| Regeneron | REGN | * | 725 | 798 | 700.33 | -1.66 | 73.71 | 1.82 | 1184 | 0.5 | |||||
| Vertex | VRTX | * | 373.65 | 484.24 | 20.25 | 96.61 | -13.17 | 501.72 | 0 |