Update-4 6/4  11 a EDT Finally small cap biotechs catch a rally: among my holdings: CRSP, EDIT, PACB, VCYT . ARKG and IBB up. But large caps look better today.FDA authorizes Regeneron subcutaneous dosage for COVID-10 antibody therapy.

Update-3  6/3 after close: Biotechs Hobble Along in a Sideways Market: IBB stuck at $151, XBI down 0.38% at $126.78. Large caps hold up in the green: GSK,LLY, RHHBY.

Merck (MRK) spins off Organon, should bring better focus to immuno-oncology, the Company’s strength. $73 stock finds buyers.

Small and mid-caps weak especially MO names: ARKG, CRSP, TDOC, TWST etc.But VIR catches a bid up 3.39%.

Vaccines continue strong with global rollout: NVAX, MRNA.


Update-2 6/2… 1:30p EDT COVID vaccine plays big movers: BNTX up 5.12%, CVAC up 3.77%, MRNA up 4%, NVAX up 19.9% with IBB flattish at $150 level. Scientific issues to watch: response of RNA vaccines to variants and duration of neutralizing antibodies with a need for a  booster shot. Have not read any negative reports as of now.

Update-1 6/1 3p EDT: Diagnostic stocks hit by Abbott (ABT) guidance cut on revenues as COVID demand declines. Quidel (QDEL) down 7%.

Hovering act near 2021 lows.



Better Trades Lie Ahead For Biotech Stocks

  • Our Healthcare Portfolio Has Done Well YTD, so no need to trade.
  • Time to Add Beta Trades in Small and Mid-Cap Biotech.
  • Biopharma stocks peaked in February and are due for a rally.

We developed the diversified Healthcare Portfolio (see below) in Q3 2020 and it has done well. But the technicals look much better after a choppy May and better trades iie ahead for biotech stocks.  The seasonality looks better for the next two months with several investments banker meetings in early June as well as the upcoming ASCO Annual Meeting.

6/1 Update .Here are some ASCO updates from Seeking Alpha: ALLO, AZN BMY, MRK, etc. Biotechs mixed at 3 p EDT.

The market has been buffeted by cross-currents such as the re-opening trade which favors cyclical and retail stocks and macro concerns about inflation risk. Polticians talk about soaring healthcare costs and the need to curb drug price increases but no legislation thus far but definitely a concern for the sector.

Here are some takeaways from healthcare and biotech performance YTD:

  1. Small caps have done well as you can see the IWM is up 15% YTD. We think speculative activity will pick up in June and July and boost beta-rich ETFS like the ARKG. Also we will provide new stocks picks this week.
  2. The XLV and UNH have carried us through two quarters and provided core ballast to our portfolio along with large cap biopharma picks.
  3. Mid-cap biopharma has lagged but can be bolstered by M&A and FDA approvals and pipeline updates.
  4. In large cap biopharma we favor ABBV, BMY and REGN but not IBB nor MRK. We recently provided performance metrics for  this group.
  5. The life science funds underperformed most ETFs but the T.Rowe Price (PRHSX) can provide diversification with tools and diagnostics like DHR and TMO.

Mini-Healthcare Portfolio Tracking  beginning 10/27/20

Initial 2020
Stock/ETF Ticker Price Wgt 11/27 %Perf Price QTR 2020 Price YTD High P
10/25 % 1 mo. 12/31 % % Perf 5/30/21 % Perf 2021
iShares NAZ Bio IBB 136 25 143.22 2.27 151.5 11.9 25.7 151.95 0.3 172.6
iShares Russell 2k IWM 163 10 184.37 16.56 196.4 30.9 18.3 225.5 15 234.42
Merck MRK 80 10 79.86 2.4 81.77 -1.39 -10 75.89 -7.22 85
United Health UNH 330 25 337.94 5.44 350.7 12.5 19.3 411.92 17.46 420.89
SPDR S&P Bio XBI 117 5 131.46 11.95 140.8 26.3 48 128.1 -9 174
Healthcare SPDR XLV 108 25 109.44 3.35 113.4 7.55 11.4 123.6 8.96 124.48
DOW DIA 345.64 13 347.83H
S&P 500 SPY 420 12.35 422.12
NASDAQ-100 QQQ 333.93 6.44 342
T.Rowe Hlth Sci
2021 * 2.60% 102.5 3.69 106.6
Fido Biotech
2021 * -15.6 21.26 -15.57 27.73
SPDR S&P Pharm XPH 50.5 -3 56
ARK Genomic ARKG 81.75 -12.34 112.47

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