Large Cap Biopharmaceuticals: 2019 Performance Snapshot-Can the XBI remain a good play for Q4?..Update-1.

Update-1 Aug 31 Saturday-Biotech Stocks on the Road  to Nowhere?

• IBB flat for the week at $102.89, down 5 pts for the month.
• XBI flat for the week at $80.37 down 7 pts for the month.
• Alexion (ALXN) down 10.17% to $100.76 on patent challenge from Amgen (AMGN) on Solaris, the ALXN blockbuster drug.The Patent Trials Appeal Board (PTAB) agreed to institute an inter parties review filed by Amgen.
• Barron’s piques interest in mRNA players Moderna (MRNA)up 3.62% on Friday, and Translate BIO (TBIO).

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Large Cap Biopharmaceuticals and Healthcare ETFs-2019

Consider this series of posts for a base case of stock data for developing a balanced portfolio of healthcare equities. In my experience late August can be a pivot point for the downside after a summer rally. But biotech stocks already peaked in April then fell again in early July as the sector was buffeted by major macro issues such as trade, the FED and an inverted yield curve. So we should be planning ahead for Q4 and a rally in healthcare equities with a 10 yr tsy yield at 1.469% and S&P yields higher around 1.81%.

It should be no surprise that the large cap weighted IBB is up only ~ 5 % YTD when many of the former growth leaders such as Biogen and Regeneron are down over 20% in 2019. The bellwether equal weighted XBI is up 10% YTD but underperformed the QQQ up over 15% YTD. If you are bullish on biotech an aggressive trade at some point would be the XBI now around $79.85.

Although biopharmaceutical stocks have not yet entered a bear market, the underlying issues of slower growth and drug pricing pushback has made stock selection paramount.

IBB at $102.71 today 8/28.

2019 Large Cap August Biopharmaceutical Performance Snapshot-August 27 YTD.

• Top Winners; Celgene (CELG) up 20%, Merck (MRK) up 13.5%, Alexion (ALXN) up 9.9%, Amgen (AMGN) up 9.3%. Bristol-Myers has merged with Celgene.
• Top Losers: Biogen (BIIB) down 28%,Regeneron (REGN) down 24.4%, Abbvie (ABBV) down 23.9%. Abbvie will acquire Allergan.

Key Takeaways:

1. Only Alexion and Merck currently have consensus “buy” ratings from analysts.
2. There is considerable uncertainty with ABBV and BMY because of mega-mergers.
3. The Fidelity Select Biotech Portfolio (FBIOX) is slightly outperforming the IBB in 2019.
4. Most of these companies have made large investment even acquisitions in potential breakthrough technologies such as CAR-T, gene editing and gene therapy.
5. The XBI still outperforms most healthcare ETFs and funds despite a huge fall from $93 to $80.

Here is our large cap biopharmaceuticals review from 4/28/19 when ALXN and CELG were leaders and the XBI was much higher. REGN was also much higher.

Future posts will focus on other healthcare subsectors and funds such as medtech, diagnostics and tools.

Disclosure long ABBV, BMY, GILD, MRK, RHHBY, trading XBI. The IBB is relatively flat.

RHHBY data not included but up 11.67% over one year with a 3.12% yield.

	Ticker	Price	2017	Price	Price	MCap	% Perform
		1/15/18	Rev$B	12/18	8/27/19	2019	2019		FWD	Analyst	%
						$B	YTD	P/S	PE	Recom	Div
Abbvie	ABBV	100.340	27.27	92.19	65.67	99.37	-23.9	3.05	7.06	2.5	6.52
Alexion	ALXN	122.710	3.47	97.36	110.16	26.45	9.93	5.88	10.04	1.9
Amgen	AMGN	185.040	23	194.67	206.49	126.53	9.27	5.37	13.67	2.3	2.81
Biogen	BIIB	335.950	11.84	300.92	220.79	41.84	-28	2.97	6.88	2.9
Bristol Myers	BMY	62.810	19.92	51.98	47.93	80.56	6.23	3.38	10.85	2.2	3.42
Celgene	CELG	106.000	12.5	64.09	96.7	69.79	20.23	4.27	7.86	2.9
Gilead Sci	GILD	79.020	27.48	62.55	63.31	82.37	-2.97	3.68	9.09	2.1	3.98
Merck	MRK	58.660	39.8	76.41	85.52	223.55	13.47	5.04	15.67	1.7	2.57
Regeneron	REGN	366.960	5.52	373.5	281.41	31.25	-24.37	4.32	11.22	2.5
Vertex	VRTX	158.000	2.3	165.71	178.25	46.85	8.87	13.56	28.88	2
XBI				71.75	78.92		10.83
IBB				96.43	102.22		4.69
FBT				124.2	127.61		3.67
FBIOX				17.74	19.4		11.97
XLV				86.46	89.69		7.45
XPH					35.67		0.7