Biotech stocks Wobble a bit after a Grueling Week but Deals and Clinical News can Drive Stocks Higher…Update-3…FED on hold

6/18/25…FED on hold with economy ok but tariffs creating uncertainty-rates unchanged. Nice little rally in SMID biotechs with both ARKG and XBI holding.  Modest gains in GH, LGND,NTRA, ROIV, RXRX, SDGR, SLDB, SUPN , TWST, TGX, VCYT, WVE. Optimism in biotechs could be a result of an IPO: Caris Life Sciences (CAI) up 33%.

6/17/26…MidEast war heats up with dire options;  TRUMP bails from critical G7meeting.  Markets indices down less than 1% but large cap drugs take another 2+ %hit: ABBV, BMY, LLY, MRK etc.,maybe his by tariffs and new Bill? Energy and treasuries show gains. ARKG down 1.05%, XBI down 1.5%. SMID Caps show red screen but we like COGT, EYPT and VCYT in here. Other gene editing stocks show gains CRSP, NTLA.

• Lily buys early stage gene medicine Company for $1.3B, VERVE Therapeutics for one time treatment of cardiovascular risk .

JUNE 16 2025.. A good day overall with all major indices up including small caps-NASDAQ led up 1.5%,healthcare stocks were laggards with weakness in drugs and devices. We had several SMID cap winners: BRKR,COGT,PACB,SLDB, SUPN and TXG. ARKG leads the way up 1.92%.We will track deals and significant news this week:

• One of our long term holds Supernus acquired SAGE Therapeutics bolstering its product portfolio.  From STAT: “The deal comes after Sage rejected a $469 million offer in January from Biogen, with which it co-developed the postpartum depression drug Zurzuvae. Monday’s announcement means Supernus will now have access to Zurzuvae, which is the only postpartum depression pill the U.S. Food and Drug Administration has approved.”
• Solid Biosciences (SLDB) was up 11% on more bad news from Sarepta product in gene therapy for muscular dystrophy.
• Look for more R&D/Licensing deals with China-14 deals worth $18.3B so far this year.

Biotech Stocks Look Good Near Term With More Deals and Favorable Clinical News

• Biotech Stocks look good as an Innovation Trade-they should be less impacted by Geopolitical turmoil.
• SMID caps favored for INNOVATION and gains from clinical news and dealmaking, despite being down YTD.
• Seasonality and technicals usually good through July and early August.

Last week was one of the worst in recent memory for geopolitical turmoil with regional wars, US demonstrations against Trump policies, and violence in Minnesota. The upcoming week has investors a little cautious with a G7 meeting and a FED update.  Amidst all of this we hope to get clarity on tariffs hopefully with a few major country deals.  So why would we be optimistic? Look for help from TRUMP on TARIFFs as he softens his stance due to global turmoil. Also  there is a lot of speculative money around even among younger people looking at trades in stocks with Robin Hood and meme stocks  And strength remains in AI and tech stocks in general. Our large cap biopharma picks are beating the market with the S&P up about 3%YTD. The QQQ is up 4.3% YTD but small and mid cap stocks lag.

Last week we got a boost in the biotech sector from the ASCO Meeting  with some good news in Precision Oncology with clinical data for breast cancer and bispecific antbodies. Major ETFs and Funds tracking the sector wobbled a bit down and our See metrics below from May 31 .For the week the ARKG was up 0.82%at $23.30  IBB up 0.82% at $128 , and the XBI down 0.87% at $83.60. All of these ETFs were slightly off the past weeks’ highs and YTD  Major news among large cap biopharma stocks own were: Eli Lilly (LLY), Merck (MRK), Regeneron (REGN) .

Large cap biopharma stocks recovering this week with good dividends worth noble are : BMY at $49.71,MRK at $81.71, PFE at $24.54, REGN at $ 529.24; our top picks have been : ABBV, GILD, LLY and VRTX.We recently added NVS and PPH.

SMID Cap -Momentum Strategy

If  you have been reading our Life Science Newsletter you’ll know we started trading strategy with a list of stocks to watch since Q2 2023. This list could be tracked via yahoo Finance and Seeking Alpha with major news items published. We have started development of an algorithm to better target small and mid cap trades and it has good potential with more resources needed. We still own the following stocks as long term positions;  ADPT,CRMD, EYPT, GH, NTRA, RYTM, SUPN.  We have traded the following SMID cap plays which are top performers : BBIO,CPRX, EXEL, PTGX, and TEM.

NB: Even the most knowledgeable trader can have difficulty with momentum trades but if you know the companies and the technology it is a good approach to build a portfolio.. But keep in mind that healthcare is only about 12% of the S&P 500 and currently lagging other sectors whereas  TECHNLOGY is about 30% weigthing of the S&P. We try to pre-screen all potential mid cap trades with:the following parameters : balance sheet, analyst recommendation, RSI and technicals.

DATA as of May 31 , 2025.