SMID Biotech Stocks Rallied Nicely the Week of 2/13/25
- Selected SMID life science stocks had a good week in a bifurcated market.
- Large cap biopharmas earnings have been strong and comprise the largest healthcare holdings in our portfolio.
- Political crosscurrents are a concern- uncertainty of TRUMP 2.0 policies.
Our MOMENTUM indicators took an upward pivot last week and we called a “risk on'” from a previous “risk off” as the XBI bounced from $88 moved up through $90 and the ARKG moved up 9% to $29.42, maybe a breakout?
Many of the stocks in our SMID Trading List were up. Amazingly the TOP SEVEN holdings from the ArkGenomic Revolution (ARKG) ETF are also on our Life Science Trading list. The move was a bit surprising because some of the TRUMP Administration actions are perceived as negative for NIH and support for medical research. For example sequencing players were down: ILMN,TWST down 9%. so we’ll need some follow through to confirm the upward trend. Most of the Large cap Biopharma earnings were good so that certainly helped. Healthcare stocks in general lagged a bit with the XLV down 1.11% for the week; the IHF U.S. Healthcare Providers ETFis p over 8% YTD and up slightly for the past week. UNH was flat down 0.67% for the week, up 3.49% YTD. The IBB was also down 0.81% for the week. So it’s really about stock picking and sub–sectors of life science markets. We actively trade the ARKG and XBI. Keep in mind that SMID caps have lagged the general market looking at the IJR and the IWM.
We haven’t had the chance to compile all the performance data from our Life Science trading model but here are some the SMID stocks we still hold in our general accounts: ADPT, ABSI, CPRX, CRMD, DNLI, GERN, GPCR, PTGX,GH, PACB, RXRX, SUPN, VCYT. Some of our new trades are : ABSI, TXG, VIGL One of our objectives for the model is to identify long term winners. We sold Natera (NTRA) too soon but both Adaptive Biotechnologies (ADPT) and NTRA work in a new diagnostic field in oncology utilizing MRD (Minimum Residual Disease) detection. Long ADPT and GH.
Some of the big SMID movers of the week are: ABSI up 24%, ANAB up 45%, BBI up 9.6%, CRSP up 25%, CYTK up 7.9%, MNMD up 19.7%, PACB up 18,59%, RXRX up 40%, TEM up 29%. Note the rise in CRSPR Therapeutics a gene editing Company following an upgrade by an Evercore ISI analyst citing milestones expected from their pipeline and strong cash position.
It’s too early to account for the rally but in general one can say that there is a lot of speculation from both the retail side and hedge funds. Also AI has crept into the rationale for the move in some of these stocks.
Notes on Trading SMID Biotech stocks: many of these stocks are too volatile to trade so you tend to sell too soon or become a day trader.