Update-3 12/5/25…3:15 PST…EYPT still strong up another 5%;.ADPT down another big 14%-Benziga has a note on a Natera buyout that must be related to drop in ADPT stock. More later but more competition is coming to blood cancers so watch ASH-American Society for Hematology coming up this weekend.
FDA Turmoil: There is an article in the WSJ today 12/5 on the Heard in the Street column that offers caution to investors on staffing and policy issues within the agency. An example this turmoil recently came up with an accelerated approval for an experimental therapy for Huntingdon’s Disease (HD) by uniQure as it prepared to submit the therapy.
Update-2 12/3/25 …Biotech stocks soared higher today with some big movers among our favorite SMID caps: CRMD up 5.5%, DNTH up 3.99%, EYPT up 6.06%, PACB up 3.95% ,QDEL up 3.76%, VCYT up 3.95%, XNCR up 8.25%; Large caps : ABBV up 2.45%, VRTX up 6.92%. But there were a few losers: ADPT down 9%, REGN down 2.48%. Details to follow with the ARKG up 3.67% and the XBI up 2.84%.
Update-1 12/2/ 25…SMID Biotechs were off slightly for the second day as investors moved back to the AI trade and took profits in the big movers of November. The IBB is is barely 4 pts off recent highs of $174. The more volatile XBI remained choppy in 2 days of trading off 5 points from last weeks high of $123.45. If you look at the heat map the Russell 2000 (IWM) flattish at the $245 level you can see the loss in momentum of many volatile SMID biotechs. Healthcare stocks were also weak. Two large cap SWISS biopharma stocks were up over 2%: Novartis (NVS) and Roche ADR (RHHBY) .
Biotech Stocks Cruise to New Highs
- The Healthcare sector SPDR (XLV)at $158 is up 8.48% MTD and 15% YTD as Congress debates who can afford healthcare premiums.
- The IBB was up 11.9% MTD and 31.5% YTD as large caps rebounded and SMID caps maintain momentum from mid-year lows.
- A confluence of factors drove the gains in biotech from deal activity to advances in genomics and new drugs for obesity and oncology.
- Tailwinds are expected from FED rate cut hopes and relief from Regulatory and Policy uncertainty.
Investors and traders are drawn to the excitement of breakthroughs in combating chronic disease and improving healthcare and biotech stocks are back featuring new drugs and new paradigms for treatment of obesity , diabetes and cancer.
IBB XLV
The healthcare and biotech sectors had to deal with much turmoil from government actions and policy uncertainty but somehow caught some of the funds gushing from investors as a rotation out of technology stocks. Maybe they were seeking something they understood better than AI or the volatility of semiconductor stocks. And with numbers less scary in “millions ” not like in AI – BiLIONS?
Our market focus since ASCO in June has been SMID (Small and Mid cap) biotechs where many companies have adequate funding and strong later stage clinical pipelines of drugs in development for cancer and immunological diseases. The theme was INNOVATION and one DRIVER was Precision Oncology with highly sensitive diagnostics and targeted therapies.
The investment vehicles for this biotech sector is becoming well known with popular ETFs cruising to new highs each carrying the whole group higher. Then you have many large Mutual Fund families focused on Healthcare and Health Sciences bringing into focus more emerging growth companies resulting in a boomlet for smaller stocks.
The results YTD are impressive even with funds and ETFs:
iShares Biotechnology (IBB) at $173.7, up 31% YTD. SMID and Large caps rebalanced:
SPDR S&P Biotech (XBI) at $122.9, is up 36.4%% YTD. Tracks momentum and SMID caps, equal weighted.
Van Eck Pharmaceutical (PPH) at $103.16, up 19.5% YTD, Tracks Large caps like
Fidelity Biotechnology Fund (FBIOX) at P $25.83, up 36.7% YTD. Large cap focus. Top Holdings incl: ABBV,KRYS,GILD, AMGN, ALNY.
Some MEDtech and general Life Science funds have begun to move up as well:
Fidelity Medical Technology and Devices (FSMEX) P $65.24, up 4.9 % YTD
T.Rowe Price Health Sciences (PRHSX) P $95.70, up 20.33% YTD. Top holdings incl: LLY,SYK,ISRG,UNH,TMO.
iShares U.S. Medical Devices ETF (IHI) P $64.31, up 10.21%.
SMID Trading Portfolio
Since mid- 2024 we began developing a model for investing in biotech consisting of a Base position of Large Cap Biopharma then gradually adding SMID caps as we became more comfortable with the sector. Below is a brief summary of these trades. We will provide a detailed review of the Trading Portfolio over the weekend. As I mentioned earlier the meteoric gains over the past month have been good enough to boost portfolios without aggressive stock picking. We trade ARKG and XBI on the long side.
Just One biotech ETF the IBB and one Mutual Fund have gains in excess of 30%.
Some of the best SMID trades from our trading portfolio in 2025 are: ADPT, COGT, CRMD, EYPT, GH, ILMN, PSNL, ROIV, RYTM, SUPN, VCYT, XNCR. All are still strong holds. Many other profitable trades are not in the portfolio sold too soon : BBIO, CYTK, IMTX, LGND, NTRA, PTGX, RZLT, TEM, and TXG. Our two most recent buys are Dianthus Therapeutics (DNTH) at $36-37 and Quidel (QDEL) at $20-21.
Healthcare and biotech stocks have made a dramatic turn-around since the ASCO Meeting in June. These gains have picked up in the recent quarter as industry executives engaged the Administration on conflicts in key policy issues such as “re-shoring”,drug pricing and affordability and staffing with the FDA approvals. No doubt Executives in the healthcare industry have done great job resolving some key issues. But there remains a serious conflict between this Administration and University Research including the NIH. The impact of Basic research is a longer term issue that needs a higher priority.