Update-4 1/3/23-1p EST,…Shift in biopharma toward large cap biotechs. Review small cap trades for profit taking. Our favorite large caps are: ABBV, GILD, LLY, MRK, REGN, VRTX; more speculative picks are BBII and PFE.
We will update our Large Cap Biopharma metrics list this weekend. Many stocks have moved up anticipating some news next week from JPM Healthcare Conference, Most are up or near 52 week highs: AMGN, LLY, REGN. MRK VRTX.
Update-3 1/2/24…10:15 A EST—Biotechs remain strong in early trading despite weak NASDAQ. JPM Healthcare 2024 Meeting ext week.
- IBB and XBI up over 2%.
- Early movers: CYRX,CBU, CRSP, GERN etc
- PFE recovery underway at $30; vaccine stocks strong BNTX,MRNA,PFE.
- Large cap biopharmas strong with top pick ABBV up 2.76%, also GILD, MRK,REGN.
Update-2 12/31/23…Momentum easing on last week of year with few gains. The QQQ was up 53.79% YTD at $409.52. Here are most widely traded life science ETFs::
- IBB up 3.47% YTD at $135.85
- XBI up 7.58% YTD at $89.29
- FBT up 2.55% YTD at $158.06
- XLV up 0.39% YTD at $136.98
- ARKG up 16.22% YTD at$32.81.
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Update-1 12/27/23 Winding down this amazing year, with two more trading days. All averages traded up slightly with S&P and NAZ near record highs indices and the Russell 2000 (IWM) up 0.35% for the day. Two more small deals were completed by Bristol Myers (BMY) and Astra -Zeneca (AZN) helping the IBB and XBI gain over 1%. We missed a trade on our small cap list as Cytokinetics which was up an astonishing 82.54% on clinical data showing the momentum of this small cap market.
We will review performance of major ETFs and Life Science Mutual Funds at year end so stay tuned.
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Small Cap Rally Pulls in Speculative Biotech’s
So far 2023 is going well with our game plan -an end of year seasonal rally coupled with a run in speculative biotechs driven by innovation. The themes gaining traction are genomics, gene therapy and neuroscience. The past four weeks have been very strong for SMID cap stocks. Several high profile deals have been announced which have catalyzed the run and we expect more to be announced at the upcoming JPMorgan Healthcare Conference beginning January 7.
- Two major speculative ETFs are leading the life science rally the equal weight SPDR S&P Biotech ETF(XBI) and the ARK Genomic Revolution ETF(ARKG).Both are up about 20% over the past 4 weeks.
- Also as part of this MOMENTUM move largely helped by lower interest rates are the large more liquid SMID cap ETFS Russell 2000 (IWM) and the iShares S&P Small Cap 600 (IJR) each up about 15% YTD.
- Volatility of individual stocks is huge however even tracking them daily so you just need to buy on the dips and have conviction.
We traded in and out of a few after huge gains simply because we have to limit our allocation to small caps and risk. It may become more volatile this upcoming week with fewer people at their trading desks and many investors rebalancing end of year portfolios. But the bulls have the edge.First I’ll highlight a several stocks we own:
- Catalyst Pharmaceuticals (CPRX) is a new pick and a commercial stage biopharma Company focused on neurological and rare neuromuscular disease (LEMS) including epilepsy with two approved products, strong R&D and balance sheet of about $100M in cash’s of 9/3023.
- Hologic (HOLX and Quide (QDEL) are well known diagnostic and device companies that are expected to resume growth in 2024 Low FWD/PE and P/S. HOLD.
- Genomics Plays: our new pick is Illumina (ILMN) with new momentum trades TWST and TXG ; We have owned and traded PACB for years.
- EVH came back strong after a dip on a big ~$300M equity offering.
- Neuroscience momentum plays look attractive after Abbvie deal for Cerevel (CERE), a recent pick. Watch Acumen (ABOS), Biogen (BIIB),Supenus (SUPN)..
- Healthcare sector coming back over past few weeks(XLV).
- Favorite large cap biopharmas: ABBV, GILD, MRK, REGN and VRTX. PFE as a long trade at $28.
- AI Play: We see GEHealthcare (GEHC) as a near term AI play because of the ability to use software on various imaging platforms (X-Ray, MRI, CT etc) to assist physicians with improved diagnosis.
| P 1/20/23 | % Perf | 2/4/23 | 12/24/23 | Perf % | Final | |||||
| Company | Ticker | $ | P | % week | P | 4 wks | YTD % | REC | 12/31/23 | |
| P | ||||||||||
| Acumen Therap | ABOS | 5.29 | 3.57 | 51.27 | -33.89 | 1.5 | 3.84 | |||
| Catalyst Pharma | CPRX | NEW | 16.1 | 19.62 | 16.58 | 19.62 | -10.86 | 1.8 | 16.81 | |
| Caribou Biosci | CRBU | NEW | 6.29 | 20.55 | 6.17 | 8.44 | -0.175 | 1.8 | 5.73 | |
| CRSPR Therap | CRSP | 49.61 | -25 | 55.27 | 4.72 | 63.67 | -9.68 | 56.63 | 2.3 | 62 |
| Cryoport | CYRX | 21.75 | -42.34 | 25.24 | 9.41 | 16.09 | 14.76 | -7.26 | 2.3 | 15.49 |
| Evolent Health | EVH | 30.83 | 13.74 | 31.96 | 2.21 | 32.08 | 8.56 | 14.25 | 1.7 | 33.03 |
| Geron | GERN | 3.19 | 9.24 | 3.22 | 3.59 | 2.29 | 17.44 | -5.37 | 1.5 | 2.11 |
| Hologic | HOLX | 79.66 | 22.41 | 84.68 | 2.28 | 71.04 | -1.58 | -5.04 | 2.4 | 71.45 |
| Immatics | IMTX | NEW | 9.3 | 9.9 | 20.88 | 13.66 | 1.5 | 10.53 | ||
| Pacific Biosci | PACB | 11.29 | 55.68 | 11.58 | -1.7 | 8.59 | 28.4 | 5 | 2.2 | 9.81 |
| Quidel/Ortho | QDEL | 88.13 | -11.56 | 89.7 | 3.93 | 73.98 | 7.19 | -13.65 | 2 | 73.70 |
| Supernus | SUPN | 40.3 | 12.3 | 41.61 | 2.29 | 29.23 | 6.04 | -18.05 | 2 | 28.94 |
| Twist Biosci | TWST | NEW | 12/2 | 18 | 37.60 | 54.39 | 34.03 | 2.2 | 36.86 | |
| 10x Genomics | TXG | NEW | 12/2 | 47.84 | 56.58 | 30.52 | 55.27 | 2.3 | 55.96 | |
| Vericel | VCEL | NEW | 31 | 34.75 | -2.09 | 31.93 | 1.5 | 35.61 | ||
| Veracyte | VCYT | 24.89 | 39.43 | 26.67 | 2.46 | 28.27 | 8.23 | 19.13 | 2.1 | 27.51 |
| SPDR Biotech | XBI | 86.99 | 14.75 | 90.39 | 1.12 | 87.62 | 20.36 | 5.57 | n/a | 89.29 |
| wildcard | ||||||||||
| ArkGenomics | ARKG | NEW | 35.28 | 32.81 | 18.88 | 16.22 | n/a | 32.81 | ||
| 12/24/23 | 5 yr | |||||||||
| iShares CoreS&P | IJR | 108.34 | 12.96 | 14.48 | 63.24 | 108.25 | ||||
| iShares Russell | IWM | 201.48 | 13.11 | 15.55 | 56.95 | 200.71 | ||||
| iShares BIO | IBB | 133.77 | 12.68 | -1.89 | 47.23 | 135.85 | ||||
| NASDAQ-100 | QQQ | 408.38 | 4.7 | 53.36 | 176.74 | 409.52 | ||||
| HealthcareSPDR | XLV | 135.02 | 3.52 | – | 63.3 | 136.38 | ||||
| T.RowePrice5 | PRHSX | 86.84 | 3.67 | -3.32 | 36.99 | 87.90 | ||||
| iShares MED Dev | IHI | 53.65 | 7.34 | 2.05 | 70.63 |