May 20 The IBB was up over 2% and most biotechs were up. Momentum is expected to improve through July. We added to our bottom fishing on ARKG today at $78 level.
Large caps perked up as well: BMY up 2.2%, AZN up 1,95%, RHHBY up 1.68%,LLY up 1.54%,
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Large Cap Biopharmas-Good Stocks to Own
Growth at a Reasonable Price Plus Dividends.
Sector Needs Drivers like M&A and Pipeline news.
Momentum is Rising So Nibble a Little.
Large cap biopharma stocks are too boring for many fund mangers. They currently lack momentum and breakthrough news that can drive the sector higher. And many biotech stocks are underperforming after an outstanding 2020. The IBB is down 1 % YTD and the equal weighted XBI is down ~10 % YTD. Large cap biopharma stocks still have an overhang from concerns about pricing legislation as well as perception of lower growth. But the trend overall is up from lows in March and most stocks have beat the IBB.And opportunities can arise as you can see with Regeneron (REGN),a laggard over 52 weeks but up about 40 points over the past 2 weeks on clinical updates with their partner Sanofi.
- Most large caps outperformed the IBB and XBI YTD.
- Speculation was extreme for small caps in Q1 2021.
- M&A is a good option for large cap pipeline expansion.
In the meantime we should look for longer term opportunities in hypergrowth small and mid cap life science stocks that have been crushed recently.And maybe now investors will see biopharma as value. The ASCO meeting on June 4 should provide clinical data in the burgeoning field of “immuno-oncology” to help sort out the product pipelines. Biogen (BIIB) has been trending up with some investors betting on a positive FDA decision by June 7 for aducanumab a potential treatment for Alzheimer’s disease.
Winners in this group YTD are as follows: GILD up 18.65%, BIIB uo 14.5%, AZN up 11.78%, ABBV up 9.89%, REGN up 8.41%.
We publish earnings metrics quarterly and you can see in the chart below comparisons of most large cap biopharmas we follow.
Disclosure: Long ABBV, AZN, BMY, GILD, MRK, REGN.
| 1/15/18 | Rev$B | 5/17/21 | 11/1/19 | 2021 | YTD | FWD | Analyst | % | ||||
| 2018 | $B | P/S | PE | Recom | Div | |||||||
| Abbvie | ABBV | 100.340 | 27.27 | 116.89 | 81.75 | 206.5 | 9.09 | 4.12 | 8.43 | 2 | 4.43 | |
| Alexion*(ALXN) | ALXN | 122.710 | 3.47 | 174.75 | 109.38 | 38.6 | 11.85 | 4.56 | 9.38 | 2.2 |
acquired by AZN
|
|
| Amgen | AMGN | 185.040 | 23 | 252.38 | 217.95 | 145 | 9.77 | 5.78 | 14.21 | 2.4 | 2.79 | |
| AstraZeneca* | AZN | 55.88 | 40.34 | 147 | 11.78 | 5.31 | 17.54 | 1.5 | 2.51 | see ALXN | ||
| Biogen | BIIB | 335.950 | 11.84 | 280.4 | 299.2 | 42.2 | 14.5 | 3.37 | 13.91 | 2.7 | – | |
| Bristol Myers | BMY | 62.810 | 19.92 | 65.46 | 57.16 | 146.2 | 5.53 | 3.42 | 8.2 | 1.9 | 2.99 | |
| Celgene* (BMY) | CELG | 106.000 | 12.5 | n/a | 108.53 | 77 | n/a | 4.69 | 8.7 | n/a |
acquired by BMY
|
|
| Gilead Sci | GILD | 79.020 | 27.48 | 69 | 64.66 | 86.6 | 18.55 | 3.4 | 10.41 | 2.3 | 4.11 | |
| GlaxoSmithK | GSK | 39.59 | 45 | 98.1 | 7.58 | 2.13 | 12.77 | 2 | 5.35 | |||
| Merck | MRK | 58.660 | 39.8 | 79.87 | 84.94 | 202.3 | -2.36 | 4.23 | 10.95 | 2 | 3.26 | |
| Regeneron | REGN | 366.960 | 5.52 | 523.73 | 310.48 | 55.8 | 8.41 | 6.07 | 13.24 | 2 | – | |
| Vertex | VRTX | 158.000 | 2.3 | 216.35 | 215.21 | 56 | -8.46 | 8.62 | 17.1 | 1.8 | – | |
| XBI | 126.63 | 83.66 | -9.9 | |||||||||
| IBB | 150 | 109.85 | -1 | |||||||||
| FBT | 161.21 | 132.92 | -4 | |||||||||
| FBIOX | 21 | 20.26 | (16.7)* | |||||||||
| XLV | 123.22 | 94.87 | 11.29 | |||||||||
| XPH | 49.54 | 39.47 | -4.84 | |||||||||
| QQQ | 324.41 | 201.23 | 3.4 | |||||||||