Biotech Small Cap Momentum Eases…Update-1 Huge Week for Small Cap Biotech Stocks

Update-1  9/19/25. It was  Huge Week for Small Cap Biotech with all major biotech tracking ETFs UP: Unfortunately traders took profits on Friday. We will review our trades over  the weekend. The IWM also led the way peaking Thursday afternoon, but still up 1.95% for the week.

Biotech Momentum Eased Slightly Last Week

• Many of our SMID BIOTECH Stock Picks are Doing Very Well:  ADPT, CRMD, CRSP, EYPT, GH, NTRA, RNA, RZLT,TEM, SUPN,
• Best performers are in Precision Oncology and Next -GEN Diagnostics enabled by AI and genomics and Neurodegenerative Diseases..
• We sold several stocks too soon: BBIO, PTGX, RZLT, TEM but overall trading has been profitable idespite volatility.

As we approach the end of the Third Quarter we see major indices at new highs as many strategists are expecting choppy action in days ahead after a rate cut on Wednesday. Late last week saw a little weakness in small caps as we look at some of our small cap holdings below in comparison to major ETFs ARKG and XBI. We need to see the Russell 2000 (IWM) gain strength in the months ahead, not only to show to show some broadening out of this strong 2025 bull market and  we expect seasonal strength in SMID biotechs through mid -January 2026. Up through September 2025 the market has been dominated by large cap Technology stocks in AI and semiconductors. The leading sectors YTD have been: technology, communication services and consumer cyclical with some gains in energy and financials recently. Healthcare remains a laggard but biotech is doing better with the IBB up 6.63% YTD at $140.98 and in a good up-trend since the April lows of about $110 and the pre-ASCO bottom.

The Russell 2000 is in a similar pattern though a bit choppier up 7.87% YTD but up 5.08% strong over one month at $238.34. Many analysts are expecting small caps to move up with a rate cut because small companies’ margins are more sensitive. .In the past there also was a benefit to biotech stocks with lower rates. We also showed recently that Large Cap biopharma was doing well so with dividends and lower rates this trend should continue, but factor in risk from the Trump policies on Tariffs and Price controls which create uncertainty to earnings.

Our assumptions and bullish position on smaller cap biotechs were reviewed on AUGUST 11. You can view our trading list to see te performance of may of our pre-screened SMID bio techs and we have featured two groups below: 1- Next generation highly sensitive Precision Oncology tests and 2- New MID Life Science picks in the oncology area.

1. Events and News to watch for in the coming week. Trading has opened  a large biotech IPO, LB Pharmaceuticals under the symbol LBRX. t is 16.52 at 11aTEDT .
2. The market for Life Science products and services is expected to grow at over 9% CAGR because of innovation and new products from breakthroughs in sequencing, genomics and AI.

Select Biotech Small Caps after a weak Day; long all individual stocks.