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Rod Raynovich
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Rod Raynovich is an entrepreneur and executive with a focus on life science companies and medical technology trends.He has over 35 years executive experience including Abbott and JNJ and has been involved three successful start-ups. Before starting Raygent and other companies he was also a... More
My company:
Raygent Capital
My blog:,Rayno Life Science
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  • Seasonal Biotech Rally On Track With Green Screen; RNA Based Therapeutics Update (DMD)

    Slow But Steady Biotech Rally

    RNA Therapeutics-Duchenne Muscular Dystrophy (NYSE:DMD)

    Despite some overhanging concerns about drug pricing and major setbacks from clinical trials like Clovis Oncology (NASDAQ:CLVS) and BioMarin Pharmaceutical (NASDAQ:BMRN) the sector looks like it wants to go up another 8-10% before it hits resistance from the most recent big sell-off in mid-September. Today we have a little buying which should give us positive performance in November setting us up for another December rally. Our most recent picks are doing well over one month:

    Cepheid (NASDAQ:CPHD) 36.7 up 19%, Curis (NASDAQ:CRIS) 2.75 up 41%, Geron (NASDAQ:GERN) 4.53 up 27.9%, Neogen (NASDAQ:NEOG) 58.5 up 15.7%,Ocera Therapeutics (NASDAQ:OCRX) 3.75 up 15%. See our Rayno Life Science Portfolio picks.

    And biotech ETFs are outperforming over the past month:

    IBB 339 up 7.1%, QQQ 114 up 1.21%, XBI 72.45 up 10.1%, XLV 72 up 3.8%

    (click to enlarge)

    Macro issues remain a risk particularly terrorism from ISIS and lately warnings about corporate profits, global growth and retail sales in 'bricks and mortar". Recent expectations for a FED rate hike for the December Meeting are over 60% probability. MACRO uncertainty could favor domestic stocks such as healthcare.


    Case Study: RNA-based Therapeutics a New Drug Class

    Here is a good albeit older review of RNA targeted drugs. Among the top players are Alnylam (NASDAQ:ALNY) and Isis Pharmaceuticals (NASDAQ:ISIS) and recently Moderna messenger therapeutics. Many RNA drugs are under clinical investigation for genetic diseases, cardiovascular, cancer and infectious disease.

    The hot story of the week is the FDA panel's concern about the Biomarin Duchenne drug drisapersen for muscular dystrophy which affects 3500 patients in the U.S. and Worldwide. The drug with the trade name Kyndrisa is an antisense oligonucleotide that induces Exon 51 skipping to provide a molecular patch for certain mutated dystrophin genes allowing production of a functional protein. Exons are parts of the gene that contain the instructions for generating the protein. The trial included 300 Duchenne patients in multiple randomized, placebo controlled studies. The FDA panel of outside advisors concluded that the data on the muscle wastage disease was not persuasive enough although they did not officially vote on approval.Both the efficacy and side effects of the drug were an issue and the FDA may decide to focus on dystrophin production as a "biomarker" to measure how the drug is working. Final FDA approval will be decided by a PDUFA date of December 27.The disease affects 1 in 3600 newborn boys or 2300 patients in the U.S. eligible for treatment with peak market potential estimated in the $300-$500M range. A competitive experimental DMD drug by Sarepata Therapeutics (NASDAQ:SRPT) is also awaiting approval with a PDUFA action date of February 26, 2106 with priority status. The Sarepta drug eteplirsen if approved has analyst forecasted sales in the $50-100M range for 2016.

    We have not covered these stocks but some analysts have said that the FDA may approve either both or neither drug based on current data. Biomarin is a much larger Company with 2015 forecasted revenues of $890M and an extensive pipeline of rare drugs for treating genetic diseases whereas there are higher expectations for the Sarepta eteplirsen approval and 2016 revenues. The Sarepta late stage pipeline is focused on DMD with a few Phase I antiviral drug candidates.

    Both stocks were volatile today BMRN 96.06 down 1.78% in heavy volume; SRPT 37.49 up 0.46% on heavy volume but was up 33.8% over the past five days.

    Disclosure long CPHD, FBIOX.

    Tags: SRPT, XBI
    Nov 26 1:23 PM | Link | Comment!
  • Biotech Rally Gains Momentum...Update-1


    Rayno Recap for week of 11/20/15

    IBB up 3.04%, XBI up 1.92%, XLV up 2.82%

    Notable Small Cap Winners

    Curis (CRIS up 4.13%, Fibrocell Sciences (NASDAQ:FCSC) up 3.42%, Geron (GERN up 4.82%, Ignyta (OTC:RXDX) up 37.39%, and Ocera Therapeutics (NASDAQ:OCRX) up 5.31%.

    Notable Rayno Dx and Tools Winners

    Cepheid (NASDAQ:CPHD) up 6.45%, Illumina (NASDAQ:ILMN) up 5.25%, NanoString (NASDAQ:NSTG) up 7.86%, Neogen (NASDAQ:NEOG) up 6.42% and Pacific Biosciences (PACB) up 28.5%.

    Disclosure long: CPHD,FCSC,RXDX


    Market Fears Abate -FED Probable Liftoff Brings Confidence to Markets

    Green Screen Across Biotech

    Biotech stocks ran up along with the general market and the DOW was initially boosted by an Apple (NASDAQ:AAPL) upgrade from Goldman Sachs. Then after the release of the FED minutes the market continued to run with the DOW up 247 points. Anxiety from the FED rate increase has abated and the feeling now is that the economy can handle it. NASDAQ was up 89 to 5075.

    Here is a market update focusing on Rayno Life Science stocks:

    • Technicals remain favorable with the IBB holding well above the 320 intermediate bottom and moving toward the recent 340 top. However keep in mind that the biotech bear market began on 9/17 at 362.50. The XBI at 70 is up 12.74% YTD and a move to 80 would get us out of bear market territory.
    • Over the past month the IBB and XBI are tracking more closely.
    • The tape today was excellent glossing over the Clovis Oncology (NASDAQ:CLVS) news Monday. Momentum is back with big moves in AGIO,BLUE, KITE,ONCE,PBYI and other story stocks in immuno-oncology and CAR-T.
    • The healthcare sector overcame pricing concerns and was a leading sector with the XLV up 1.99%.
    • Rayno small caps are volatile and new picks from the Bio Investor Forum are soaring: Curis , Geron and Ocera Therapeutics . Ignyta is up 34% over one month.
    • Even large caps ran up big: Alexion (NASDAQ:ALXN) up 3.18%, Biogen (NASDAQ:BIIB) up 4.47%, Gilead Sciences (NASDAQ:GILD) up 3.44%, Regeneron (NASDAQ:REGN) up 2.83% and Vertex (NASDAQ:VRTX) up 3.9%.
    • Two reiterated Dx and Tools picks for Q4 were strong: Cepheid up 3.71% and Neogen up 1.51%.

    The seasonal move in biotech stocks began early in October after a crushing downdraft in August and September. The recovery is well underway so an intermediate move of 5% to September tops would be expected. Hold core positions and if underweight be careful about adding IBB, XBI or even a fund such as Fidelity Select Biotech Portfolio (MUTF:FBIOX), but investors appear to have more risk appetite for now.

    Nov 20 5:29 PM | Link | Comment!
  • Rayno Tools And Molecular Diagnostics: Looking For Value

    Looking for Value in a Slow Growth Market

    Life Science stocks took a big hit over the past summer and many have not fully recovered.The important metric to watch is sales growth because many of the smaller cap companies are still lagging in earnings growth so the PE tells you very little. The major technology driver has been molecular testing platforms many of which are still so called LDTs (Lab Developed Tests) that are not approved by the FDA. We are focused on smaller cap companies that have sales growth and/or M&A potential in several interesting markets such as infectious diseases, oncology, cardiovascular, genetic diseases, pre-natal, agricultural and environmental.

    Personalized medicine (Precision Medicine) is an important therapeutic initiative that takes individual variability into account. Over the near term new targeted cancer drugs will require biomarkers or companion diagnostic tests to assure the best treatments, i.e."the right drug at the right dose to the right patient". NGS or Next Gen sequencing from companies such as Illumina (NASDAQ:ILMN) and Pacific Bioscience (NASDAQ:PACB) provide important tools for drug development and molecular medicine and growth will continue albeit at a slower pace.

    Molecular diagnostics are expected to grow 9-10% over the next 3 years so there will be more winners in this group in 2016, but hypergrowth in the sequencing market may be over.

    Of course the most famous story in clinical diagnostics is a unicorn called Theranos but we will not go into that. The Company claims to have a unique "nanotainer" technology that can perform a multiplicity of blood tests with a small sample. One question is how it avoided scrutiny in a high-profile industry.

    Many stocks have limited revenue growth and this is reflected in stock prices, but some stocks have already bounced big from recent September lows: Abaxis (ABAX), Cepheid (NASDAQ:CPHD), Illumina , Neogen (NASDAQ:NEOG) and Pacific Biosciences .

    Top Winners YTD

    • Hologic HOLX) up 47.8%
    • Luminex (NASDAQ:LMNX) up 10.8%
    • Neogen up 10.7%
    • Alere (NYSE:ALR) up 9.8%
    • Qiagen (NASDAQ:QGEN) up 6.6%

    Top Losers YTD

    • Cepheid (CPHD) down 33.7%
    • Quidel (NASDAQ:QDEL) down 27.2%
    • Foundation Medicine (NASDAQ:FMI) down 22.1%
    • Genomic Health (NASDAQ:GHDX) down 17%
    • Illumina down 13.8%

    The fourth quarter should provide clues to real sales growth and consolidation has always offered M&A potential. These stocks have been good trades off the bottom but long-term value will depend on Q4 results. Recent technicals look good on ABAX, CPHD, HOLX, LMNX, NEOG, QDEL and TMO. The CEO recently bought stock in QDEL.

    LONG Cepheid

    2010/15 OriginalPrice5 YrRayno11/3/2015MarketPrice/PEGSales Q/QStockP
    Dx and ToolsSymbolStart$High $% PerfP $CapSales %%YTD
         9/15/2015 $B    
    Foundation MedFMI11/17/201425.8654.28-
    Genomic HealthGHDX2/26/20132937.74-13.822.350.7112.53---17
    **acquired byHOLX          
    iShares RussellIWM3/1/20094212927611926.65    
    Nov 07 6:41 PM | Link | Comment!
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