Update-3 5/22-23….. 10:50a EDT….VIGL continues to run on Sanofi acquisition.at $8/sh. Should spark our SMID biotech trading list but XBI is stuck at $78.
Ahead of ASCO we should see more green shoots among SMID biotechs and soon some major news from oncology players like MERUS N.V.(MRUS) which was up 13% AH on a Ph 2 study announcing the positive Phase 2 clinical data to be presented at ASCO for the company’s lead program an ADAC, petosemtamab, in combination with pembrolizumab (Keytruda®) for the treatment of metastatic or recurrent head and neck squamous cell carcinoma (HNSCC) where it is being evaluated as a first-line treatment.
5/23…..Watch XBI from the $79 level now though next week for a bullish backdrop on ASCO.
SMID stocks look good for next week, my CRMD and RYTM have comeback to near 2024 highs. I had a good week because of two recent trades :MRUS up 32.66 to $55 and VIGL up 216%.
Another recent trade was an ETF we never bought before. We added PPH at $87 to overweight stocks we now hold LLY, ABBV, and NVS as well as others we think might move AZN,MCK and SNY.
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Update-2 5/20.. 10;30a…PFE up 2% to $23+looking better, pays 7%; Will report trades today if momentum continues. MNMD up 12% on Trump admin news.Another nibble on REGN with some PR support(SANOFI). From SMID trading list-both RYTM and VIGL back in green. Nibbled on MRUS at $43+.
Update-1 5/19….Biotech catches some bids with most large caps up: 3% or more movers: AMGN, BIIB, GILD MRK.United Health bargain hunters boost UNH up 8% to $315 level.XLV up 1%. SMID biotech leaders today: ADMA,ADPT,CRMD, GERN, IMTX, NVAX, PTGX, RZLT.
I may be early but nibbled on REGN a former high flier and bought PPH an ETF focused on large cap biopharmas.
Healthcare Sector Review-MedTech Sector Looks Good
- The healthcare Sector is down over 3% YTD underperforming most ETF Sector plays.
- The weekly volatility by sector is amazing largely driven by the Administration and the global reaction to tariffs. e.g.tech stocks.
- The best healthcare sub-sector YTD is MedTech and the worst is small cap biotech but growth and MOMENTUM are back.
After such big gains of 5.29% in the S&P 500 last week (now up 1.39% YTD) amidst all the tariff turmoil and week to week volatility you may ask yourself is it time to play it safe with 4.5% returns with Treasuries? Is your portfolio beating the S&P 500? And its was a huge week for tech stocks with NASDAQ-100 (QQQ) up 6.87% last week and now up 2% YTD. The XLK technology ETF gained almost 8% for the week! Yet if you follow the market you know about al the MACRO risks the are out there even though most financial results for the first quarter were good. Then there is the deficit and budget reconciliation process, rising treasury yields and of course tariffs.
Here the current performance of the ETF family the Blackrock SPDRs with some sectors leading the S&P: Financial (XLF) up 6.75%, XLC Communication Sector up about 5% YTD, Industrials (XLI) up 9% YTD. But the XLV Healthcare SPDR is down 3.25% YTD with the damage attributed to the price weighted United Health (UNH) down about 42% % YTD, and Van Eck Pharmaceuticals (PPH) flat YTD. Small caps have recovered from the April bottom but the IJR and IWM are still down about 5 % YTD. And of course if you were really on top of your game with just a 5% portfolio position in gold/gold miners would have helped you beat the S&P !
Now let’s look deeper at the Sector Breakdown with Healthcare Stocks:
- Healthcare providers are normally defensive but the UNH problem created an unprecedented upheaval with the US Healthcare Providers (IHF) flat YTD at $48.off a recent high of $54.
- Large cap pharmaceuticals have led performance in healthcare sector for many-years but over the past few years high drug prices have become a bipartisan political issue and now being threatened by Trump’s Executive orders as well as sanctions and PBM reform. We show the YTD performance of leading biopharma companies below ut 3 an act the S&P especially with dividends: ABBV up 3.56% YTD, AMGN up 4.52%, GILD up 11%,and VRTX up 8.93%.
- MEDTech and Life Science stocks always offer trading opportunities although many are small and mid-caps Some analysts think US Medical devices and sevics are less affected by tariffs although many companies reported a “supply chain” impact on cost of goods. The TOP TEN holdings of the IHI include some of the most innovative companies worldwide: ABT,BSX, ISRG and SYK.
If you are now underweight Healthcare and Biotech Stocks what to do next? Some trading ideas:
- Add a little UNH because it is oversold and the Company should take action,
- Review your healthcare holdings and if underweight add a FUND like FSMEX down 3.7% YTD, JNGLX down 5.5% YTD and PRHSX down 5.96% YTD. If these experienced fund managers can’t do better then what??
- ADD the IHI up 7.54% YTD or a MEDTECH stock to your portfolio for better diversification.
- Focus on limiting portfolio risk by staying with the S&P 500 (SPY) with apropriate hedges and cash positions.
- Add selective large cap biopharma stocks based on upgrades or metrics.
- Hold your SMID winners and buy bellwether XBI add $79 down over 12% YTD for seasonal move through JULY. My longer term SMID holds are : ADPT, CRMD, GH, SUPN. VCYT etc.
- The IXJ a healthcare ETF more weighted with International stocks is down 1.21%.
We last published a complete healthcare and biotech portfolio review on 3/23/25 and as you can see almost all stocks and ETFs are down around 10% since that date. But the IHI and several stock positions in the US medical Device ETF like ABT, BSX , have made nice gains.
Remember the healthcare weighting in the S&P is only about 12-15% so it is harder to beat the SPY.
LONG: ABT, ABBV, FBIOX, FSMEX PRHSX,,UNH and many small and mid caps.