Large Cap Biopharmaceuticals Performance…Update-3 #ASCO24 gains are ahead

UPDATE 3: Large cap biopharmas were strong on Friday in anticipation of #ASCO24 data. Company news to watch from data below:AZN, BMY, GILD, LLY, MRK, PFE,REGN and also ADPT, MRUS, NVS. REPL.. See updates all next week.

Update-2 MAY 31,,,Biopharma stocks took a dip midweek during FED speak then recovered pretty much. ABBV was up 1.88%,BIIB was up 3.16 and MRK was down 4.33% (acquisition?).UNH sold off again down 4.15%. a good week is expected from ASCO data.

Update-1 May 25—-Large cap biopharma stocks were mainly on course as we approach the ASCO Meeting on May 31-June 2, with the latest breakthroughs in oncology and hematology developments.  The S&P was up slightly for the week, technology stocks were leaders as usual boosted by NVDA and chip stocks. Healthcare was lower  with the XLV off 1.29%, but SMID biotechs took a big hit with rising rates and the XBI slid 2.58% to $88.53. Our top picks held up well especially VRTX up 2.64% to new highs with big expectations for its pain drug. And of course if you follow biopharma or any health news you know the Lilly story and its blockbuster drugs Mounjaro and Zepbound for obesity and diabetes. ABBV was off a hefty 6.45% die to an acquisition so we may need to closely track the stock for new developments..

Some notable weak sectors were real estate and energy so with the market at new highs most strategists see a small correction ahead with FEDspeak creating a lot of volatilty. A good reason to stay  with defensive plays like biopharma.

5/26 Update –LAGGARDS…-We recommended PFIZER (PFE) as laggard trade about a month ago and it made a run at $30 but slammed back over the past week. Yield is 5.87% with some good clinical news coming from ASCO and vaccine sales up-tick should break through the wall of resistance.

Same for Bristol Myers (BMY) with ASCO oncology presentations. And the stock due for an upgrade at $41.25. Yield is 5.82%.

With technology stocks running up and AI/Nvidia led momentum strong it’s hard to focus on biotech. But this has to be a good week for product news and stock appreciation.

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Large  Cap Biopharmaceuticals-Performance Metrics

We provide this data on a quarterly basis to help investors with portfolio management of healthcare stocks. We see these  large cap stocks as the best overall opportunity for investors within the healthcare sector. We gave a general overview of various subsectors last week as kind of oadmap of  the components.But large  caps provide top line growth with good value with dividends. But this strategy does require that the investor track news and earnings. As you can see from this data there is a lot of variability of performance over a 12 month period. Our top picks over the past 6 months has been: ABBV, LLY, MRK, REGN and VRTX. As a recent contrarian pick we believe that Pfizer (PFE) performance should turn around due to some recent pipeline deals particularly the acquisition of Seagen (SGEN) for it line of cancer therapies.

As a defensive play healthcare is weighted at about 12% of the S&P 500 not so big considering that Technology stocks (XLK) are weighted at about 29.86% and have gained 2% YTD and about 31 % over one year. The recent applications of AI tools and importance of data management have driven technology and semiconductor stocks to new highs.

Here are some takeaways from this data:

1. The top performing stocks YTD and the past 12 months are: ABBV, LLY, AMGN, MRK, VRTX and REGN.
2. The laggards are: BMY,BIIB, GILD and PFE.
3. M&A has been a major factor for building product pipeline, core technology and top line growth examples include ABBV, AZN, GILD, and MRK.
4. Keep in mind that JNJ has got through a major restructuring with spinoff of Kenvue  and is now focused on Biopharma and Medtech.
5. There is not an ETF for investing in these stocks but you can get some play with diversification with one ETF(XLV)  and ONE Fund (PRHSX).
6. The major products event has been the GLP-1 class of weight loss drugs by Lilly and Novo Nordisk.
7. The biotech sector remains a laggard YTD as can be seen by the IBB.
8. Drug pricing remains a target for Congress with expectations for the IRA Medicare drug pricing legislation to hit selected companies in September.

LONG: ABBV, AZN,LLY, MRK, PFE, REGN, VRTX.

Last column updated per 6/1 prices.