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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:
Raygent.com,Rayno Life Science
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  • Sentiment Shift In A Wild Week: Biotech Bull Is Back-JUNO IPO Up 45%!

    Biotech Stocks Rally to New Highs After 4% Correction

    Buyers Are Bottom Feeding Energy Stocks

    NASDAQ at 4765

    Just as the market appeared to be headed to another test of October lows, challenged by news on slowing global growth and a collapsing energy sector, FED Chair Janet Yellen calmed the markets saying it would be "patient" on raising interest rates. This triggered an amazing 4.5% upside move in just two days showing how sentiment drives markets. Although perceived macro risks have not changed since Monday, any concern about sharp increases in interest rates has been put aside for now. Energy stocks also rallied since Monday with the XLE up 8.8% over five days.

    Here is a brief summary of market data, after a huge week, from the life science sector now that we are back to new highs.

    • Nasdaq is up 14% YTD, the healthcare sector XLV is up 27% YTD.
    • All major biotech ETFs are back to new highs (FBT, XBI, IBB). Our favorite the FBT is up 52% YTD.
    • Rayno Biopharmaceutical Sector Picks: Large Caps up 39%, Mid-Caps up 33%, recent Small Cap Spec picks up 12% over 3 months. One of our mid-cap picks Cubist Pharmaceuticals (CBST) is being sold to Merck (NYSE:MRK) for $102/sh. CBSTis up 43% YTD and 421% over five years.
    • Institutions are the major driver behind the bull, with deep pockets, seemingly able to move stocks at will.
    • Expect volatility in the sector especially in January.

    A biotech IPO today, Juno Therapeutics focused in immunotherapy for cancer (CAR-T for chimeric antigen receptor T-cells), is up 45% from offering price of $24 with 11 M shares being sold. The market capof JUNOis approaching $3B with 5 products in the pipeline. The Company is based in Seattle and was founded by a group of scientists at Fred Hutchinson Cancer Research Center in Seattle and Memorial Sloan Kettering Cancer Center in New York with over $330M in funding from ARCH Venture Partners, Venrock and Jeff Bezos, CEO of Amazon. We covered the hot T-cell therapy area with an article from the 2014 BIO Investor Forum where four companies presented their potential products and technologies. We will provide an update of these four companies-BLUE, GBIM. KITE , ZIOP- in comparison to JUNO. All of the stocks have soared, in a way "feeding off" each other. For example, Kite Pharma (KITE) has 5 products in clinical development and is up 111% over 3 months perhaps anticipating the JUNO hot IPO.

    Here is a good summary of the IPO in the Saturday December 20, NYT.

    Our investment strategy has not changed through year-end.

    • Hold core positions in Rayno Large cap picks or FBT.
    • Caution on new positions except for trades.
    • Keep 10% in cash.

    The 2015 J.P.Morgan Conference beginning January 12 will offer an excellent perspective on Life Science investing with presentations by many companies and potential new themes to emerge. However we are in year five of a secular bull market in healthcare and biotech stocks so it may be difficult to maintain these huge returns of 280% over five years with only one correction. Q1 in 2014 saw a huge "bio-bubble" in February followed by a 9% correction in March/April but we are still up ~50% YTD assuming you are in leading ETFs.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: The author is long FBIOX and several small cap biopharma stocks.

    Tags: JUNO, KITE
    Dec 20 8:01 PM | Link | Comment!
  • Rayno Life Science Stocks: YTD Review Part 1-FBT Up 49%

    Part 1 Biopharmaceutical Stocks-New Highs Were Hit on December 10

    Five Straight Years of Gains in Biotech-the IBB is up 292% since Dec 18, 2009

    Biotech stocks are following the long term seasonal bullish trend surging in Q4 and up about 49 % YTD. The easiest way to invest in the biotech market is with the ETF First Trust NYSE Arca Biotechnology Index (NYSEARCA:FBT). Another ETF the SPDR S&P Biotech (NYSEARCA:XBI) is up 42% YTD and during market surges can outperform the FBT. The IBB is up 36.5% YTD. If you prefer actively managed funds the Fidelity Select Biotechnology Fund (MUTF:FBIOX) also tracks the XBI and IBB but be careful in December because mutual fund dividends are declared and taxable if not in tax deferred accounts.Although the market has surged to new highs this week the action has been a little choppy with a lot of volatility in individual stocks.

    We have created three stock motifs for biopharmaceutical investing all of which are among our portfolio picks.

    Rayno Large Cap Biopharmaceutical Portfolio

    Our favored core portfolio consist of large caps including FBT. The large cap portfolio selections are : Alexion Pharmaceuticals (NASDAQ:ALXN), Amgen Inc. (NASDAQ:AMGN), Biogen Idec Inc.(NASDAQ:BIIB), Gilead Sciences (NASDAQ:GILD), Regeneron Pharmaceutical (NASDAQ:REGN) and Roche Holding Ltd ADR (OTCQX:RHHBY). All of these stocks with the exception of FBT and RHHBY were in our original portfolio in 2008-9. The bull market in biotechnology began in March 2009 coinciding with ObamaCare initiatives. By the end of 2010 the biotech bull market was well under way. The Rayno Large Cap Portfolio is up 39% YTD.

    Here is the Rayno Biopharmaceutical Portfolio at the end of 2012. Biogen Idec was $49 and Gilead was $35 at March 2009 bottom!

    Rayno Mid Cap Biopharmaceutical Portfolio

    Over the past two years as funds moved more money into biotech the big winners have been in the mid cap area, about $5-10B in market capitalization originally. Our current mid cap picks are: Alkermes (NASDAQ:ALKS), Cubist (NASDAQ:CBST), Pharmacyclics (NASDAQ:PCYC) and Seattle Genetics (NASDAQ:SGEN) and Vertex Pharmaceuticals (NASDAQ:VRTX) up 62% in 2014. Some of our mid cap picks were acquired such as Cubist recently and Cephalon in 2013. The Rayno Mid Cap Portfolio is up 33% YTD.

    Rayno Small Cap Speculative Picks

    Last August and again in October we added several small cap "trades" based on the assumption that many smaller caps were beaten down after the February 2014 "bubble" top and were due for a rally in Q4. All have been good trades but extremely volatile. The winners were Celldex Therapeutics (NASDAQ:CLDX) and GlycoMimetics Inc.(NASDAQ:GLYC). The loser was FibroCell Sciences (NASDAQ:FCSC).

    Have a look at the 2013 year end performance of Rayno Biopharmaceutical picks. 2013 was a huge year for biotech with the IBB up 65% and that was before the huge run-up in Jan/Feb 2014. Four companies on our list were acquired: Astex, Cephalon, Optimer, and Viropharma.

    Expect bullish action though the JPMorgan Conference in mid January as there is potential for product news and M&A.

    Part 2 will focus on Rayno Diagnostics and Tools stocks.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Long FBIOX

    Tags: FBT
    Dec 14 8:45 PM | Link | Comment!
  • Energy Weakness Rolls Over To Biotech Stocks

    Biotech Stocks Sell-Off After Hitting New Highs Monday

    NASDAQ at 4735 off 0.67%

    Healthcare and life science stocks have been a safe haven from recent market headwinds but today risk is off across the board. Crude is down over 5% to $61 and this has raised concerns about global growth affecting other asset classes like financials and industrials.The Dow and S&P are having another down day off about 0.8%. The healthcare space is off about 0.6% today with the bellwether XLV off only 0.5% but stable over the past five days after hitting new highs Monday up 28% YTD. Biotech stocks are being nipped today with the FBT down 1.35% but up almost 50% YTD.

    Stay the course with a portfolio of large and mid cap stocks or a biotech ETF like FBT.

    Most Rayno Life Science picks are in the red today but many speculative small cap stocks are still catching bids as can be seen by these oncology stocks:

    In October we attend the BIO Investor Forum and one of the hot sessions was "T-Cell Therapies-Prioritizing Cancer Targets". We mentioned four companies that have promising early stage therapies for arming the body's own T-cells to fight cancer. Aggressive traders who bought all four stocks in late October would have reaped big profits over 1 month: bluebird bio (NASDAQ:BLUE) up 124%, GlobImmune (NASDAQ:GBIM) up 25%, Kite Pharma (NASDAQ:KITE) up 32.4% and ZIOPharm Oncology (NASDAQ:ZIOP) up 19.2%.

    Coming later this week: Rayno Portfolio Review and update from October 31. NB our mid-cap motif is now up 28.9% after Cubist (CBST acquisition by Merck (NYSE:MRK)

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: The author is long FBIOX FIdelity Select Biotech Fund.

    Tags: XLV
    Dec 10 1:49 PM | Link | Comment!
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