What’s Behind the Moves in the Healthcare Sector: Many Options for investing-Biotech, Medtech, Tools.

Nov 10, 2025 | 2024-25 Life Science Portfolios, 2025 Rayno Biopharmaceuticals Portfolio, Biopharmaceuticals

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                An abrupt reversal from “Risk-Off” sentiment launched a rally in some SMID biotechs, precious metals and AI / Semiconductor stocks. The NAZ was up 2.25%.

  • Health Science stocks did well today: Precision oncology, biopharmaceuticals weight-loss /obesity
  • A volatile choppy week for the market especially in the technology sector but healthcare and biotech stocks recovered Friday and looked much better.
  • SMID Biotechs are favored for gains and M and A for Q4 while holding large caps for dividends.
  • Today the S&P 500 closed 1.5% higher on end of government shutdown but more bifurcation is inevitable with healthcare  in focus and REPUBLICANS wanting to winnow away Obamacare. One casualty from Congress was health insurers with the (IHF) Providers ETF down 1.5%, with smaller insurers down a lot more.

Here is where we are in biotech as of last Friday and before todays rally:

IBB up 19.3% YTD at $157. XBI up 21% YTD at $109, ARKG up 1905% YTD at $28.03. QQQ  19.27% YTD at $610,

There was a lot of volatility among various sectors of the market last week but the XLV was up over 1%. The S&P 500 fell 1.6% led by technology stocks and the consumer sentiment dropped to a 3 year low. And the volatility came from AI stocks as the pundits began to challenge the massive investment required for AI so the MAGS was down 3.4 %  and the XLK was down over 4%. Within the biotech sector you saw a  “risk -off” mentality last week where the IBB came back to being down only 1% whereas the ARKG was down almost 10%.The 5 year high on the IBB is $177 reached during the pandemic “bubble.

Here are charts for the XBI and IBB.The IBB looks more solid in here because of large cap weighting.

Healthcare stocks are moving up slowly from Mid-October lows so that the XLV is now up 6.23% YTD but still trails the S&P500 (SPY) up 14.5% YTD. Most of the gains have come from Large Cap Biopharma as we have covered throughout 2025. Despite all concerns about price controls and pushbacks from the Trump Administration including legislation that began in the Biden days with the IRA, the drug stocks have outperformed. Most of our favorite stocks-Abbvie, Gilead Sciences,  Eli Lilly – are off their recent highs yet have outperformed the S&P 500 and we have summarized the performance of our large caps  below. Eli Lilly (LLY) was up 4.9% to $969 today on an upgrade.

Here is our previous Large Cap Biopharma update on Sep 1. Since SEP 1 our top picks have done better:

  • ABBV up 23% YTD, GILD up 27.9% YTD, LLY up 25.21%, REGN down 8% YTD (new pick) up 16% I mo.,, VRTX up 4.6% YTD,
  • We also own Novartis (NVS), Pfizer(PFE) and Roche (RHHBY)

One of the underlying themes of the market since early June has been biotechnology with growth from blockbuster drugs for weight/loss and obesity as well as diabetes. More deals are expected to boost the sector in the near future such as competing bids for Metsera from Novo and Pfizer, which in the end was won by Pfizer who offered $10B and needed the deal stay in the race.

Small and Mid-Cap Biotech-Look for Clinical Development and M&A to Lead these stocks higher 

SMID Caps in biotechnology have also traded agressively with major clinical developments in oncology, immunology and orphan drugs including several major acquisitions.Investing in SMID caps has been challenging with al the volatility as you can see from the recent downturn in the XBI. We have made some excellent trades in smaller cap biotechs and today one of our best picks Cogent Biosciences (COGT) was up over 133% on results from their Phase 3 trial for stomach cancer.

Our leading SMID stocks YTD are in the Precision Oncology area for detection of DNA for monitoring cancer treatments known as MRDs (minimum residual disease. Here is our SEP 4 SMID Update where we featured :CBIO, PSNL and XNCR.

Personalis, Inc. (PSNL) develops, markets, and sells advanced cancer genomic tests and services in the United States and internationally. The company offers NeXT Personal, a tumor-informed liquid biopsy test for detection of minimal residual disease (MRD), therapy response and recurrence monitoring in solid tumor cancers; and ImmunoID NeXT, a tissue-based service that combines whole exome and whole transcriptome sequencing data with advanced analytics to provide a multi-dimensional view of the tumor and the tumor microenvironment from a single sample. Market cap $451M. Pcash 4.61, Analyst rating 1.21.

  • Personalis (PSNL) was up 24% to $8.63 today as it received Medicare coverage for an ultra sensitive MRD test for breast cancer. 

We cant cover all of the Focus stocks on our Trading List but here are SMID biotechs that we still own all up YTD and since we bought them:

  • ABOS, ADPT, CRMD, CYRX, EYPT, GH, ILMN (new), PSNL, ROIV, RYTM, SLDB, SUPN, TEM, VCYT, XNCR.

The following SMID biotechs are still winners but for some reason we sold them too soon:

  • BBIO,CYTK, EXEL ,RNA, LGND, NTRA.

Well known Mutual Funds we have covered tracking biotech , MEDtech and Health Science stocks, including tools and DX.

Fidelity Biotechnology Fund (FBIOX) P $23.30, up 23.54% YTD. Large cap focus : ABBV, ALNY,  AMGN, GILD,  etc.

Fidelity Medical Technology and Devices (FSMEX) P $62.00 down1.0.3% YTD up 3.5% MTD.Med Tech focus:  BSX, DHR, TMO. ISRG etc.

Janus Henderson Life Science Fund (JFNAX) P $76.57, up 15.59% YTD up 6.44% MTD

T.Rowe Price Health Sciences (PRHSX) P $8.51 up 10% YTD, up 3.99% MTD. Top holding large caps: LLY, SYK, UNH, ISRG.

iShares U.S. Medical Devices ETF (IHI) P $61.87, up 5% YTD, up 2.17% MTD, Focus large cap MEDtech: ABT, BSX, ISRG .

The MEDtech sector has been lagging compared to biopharma so it might be a better idea to pick a few large caps or the PRHSX Fund unit the next earnings cycle. We are long: ABT, BSX and ISRG. We are also long: FBIOX, FSMEX, PRHSX,

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