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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 30 years executive experience including Abbott and JNJ and has been involved three successful start-ups. He has a B.S. from Penn State University and an MBA from... More
My company:
Raygent Capital
My blog:
raygent.com
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  • Seeking A Tradable Bottom For Biotech Stocks

    Key Trends To Watch: April Update After Correction

    We provided a bull market model on January 9 to track performance of life science stocks prior to the "bubblicious" run up in January and late February. Now that we have corrected 15-20% on the indices and much more on high flier momentum stocks it is time to survey the damage and find at least a trading bottom.

    Trend #1 Large Cap Biopharmaceuticals

    These stocks are trading at or near their early January levels so we need to have these market leaders bottom before we get another leg up. Regeneron (REGN $286) is still up 3.9% YTD, Alexion (ALXN$146.60) is up 10% YTD, while Celgene (CELG$138) -not on our focus list- is down 18% YTD.

    Trend #2 Emerging Mid -Cap Growth Stocks in Immuno-Oncology

    Many widely held, mid-cap growth stocks are in this group and many high fliers are down 20-30% from their 2014 highs. On our focus list is Pharmacyclics (PCYC $99.74) off 5.7% YTD, and Seattle Genetics (SGEN $41.30) up 3.4% YTD; not on our list are Biomarin (BMRN) off 9.45% YTD, Clovis (CLVS) up 9.1% YTD, Incyte (INCY$49.38) down 2.25% YTD, Medivation (MDVN $60) down 5.22% YTD, and Puma (PBYI $81) down 21.7% YTD. We would avoid any new buys in the mid-cap group for now.

    Looking back at our October 9 Valuation Model which compares these stocks to Onyx Pharmaceuticals which Amgen (AMGN) bought for $10B, we see that no M&A deals have been struck in this market cap range and do not see buy-outs as a market driver at the higher mid-cap $7-10B range. Product pipeline news will drive stocks.

    Trend #3 Small Cap Speculative Biopharmaceutical Stocks

    We would avoid this category for now as our latest two picks Ariad (ARIA $7.28) and Achillion (ACHN $3.08) have traded down and are too volatile. These stocks are for day traders and speculators but should see many good days ahead.

    Trend #4 ETFs and Mutual Funds

    We are looking for a buy signal here primarily from Fidelity Select Biotech Fund (FBIOX $184) which is up 1.5% YTD after peaking at $228 last February and down 15.6% over last month. FBIOX holds all the major large caps. Both of major ETFs -IBB, XBI -are flirting with an intermediate bottom but have one failed rally since the downturn.

    The more stable healthcare ETF XLV ($57) was very choppy in March but is still up 3% YTD after hitting a high of $60 in early March. It has a large weighting in leading biotech stocks.

    Trend #5 Life Science Tools and Diagnostic Stocks -Will Be Covered In New Post

    Summary

    • Caution still rules, no bottom confirmed, watch technicals.
    • Review the Rayno Portfolio Picks for Q1 Performance.
    • Cash levels should be high at least 20%.

    Disclosure: I am long GILD, XLV.

    Additional disclosure: I am long Fidelity Select Biotech (FBIOX) and Gilead (GILD) and short mid-cap biopharma stocks on a day to day basis including XBI; shorts only as a hedge.

    Tags: ALXN, BIIB, GILD, XBI
    Apr 08 2:51 PM | Link | Comment!
  • Biotech Sell-Off Resumes: Caution Update 4/4

    Update 4/4/14 Breach of Technicals-A Tad Below Early February Support

    Glut of Biotech IPOs Causing Indigestion?

    Momentum Days Are So Over

    NASDAQ Down 1.34%

    The volatile and speculative SPDR S&P Biotech XBI hit $136 in early trading down 2.28%. After a brief rally early this week to the $148 level volume picked up with sellers. The IBB ($230.94) focused more in larger cap biopharmas is also down over 2% and is now only up 1% YTD after hitting a FEB 25 high of $273. Another red screen day with many widely held stocks down 3%. Abbvie (ABBV) and Bristol Myers (BMY) are holding the green.

    Red Screen after Three Day Rally-February Lows Still Holding

    Many widely held biopharmaceutical stocks are down today as NASDAQ turns negative down 0.38% or 16 points. Here are selected quotes as of 11 am EDT:

    Aegerion (AEGR $42.56) down 4%

    Alexion (ALXN $150) down 2.9%

    Celgene (CELG $143.70) down 2.5%

    Gilead (GILD $72.60) down 1.87%

    IBB ($235) down 2.73%

    Illumina (ILMN $151) down 3.53%

    Incyte (INCY $52) down 4.3%

    Seattle Genetics (SGEN $42) down 4%

    Vertex (VRTX) down 3.83%

    XBI ($139.26) down 3.57%

    (click to enlarge)

    Disclosure: I am long GILD, ABBV.

    Additional disclosure: Long FBIOX Fidelity Biotech and short XBI as a hedge.

    Tags: XBI
    Apr 04 12:16 PM | Link | Comment!
  • Rayno Life Science: Tools And Diagnostics Q1 2014 Performance

    Caution As Life Science Stocks Are Consolidating

    Life science stocks had a wild roller coaster ride in 2014 with many stocks peaking around March 1. Momentum and cult stocks in our portfolio still had a good quarter with the following top winners:

    Illumina (ILMN up 25.2%, Vermillion (VRML) up 25%, Exact Sciences (EXAS) up 21% and Nanostring (NSTG) up 19.7%.

    Among the top losers, all solid companies, were:

    Quidel (QDEL) down 11.2%, Qiagen (QGEN) down 11.3%, and Cardiovascular Systems down 7.3%.

    However you should check gains in 2013 as many of these stocks had outstanding performance.

    Stocks which are stuck in the doldrums during this 24 mo. uber-bull market are: Genomic Health (GHDX), Hologic (HOLX) and Neogen (NEOG) which all can considered "value" stocks.

    We will review the portfolio after Q1 earnings as they are reported over the next 60 days. See other posts on 2013 financials for Rayno Dx and Tools.

    Rayno Diagnostics and Tools Portfolio

    2010-2014 OriginalPricePrice%Price% RETP 2013%RETPrice% RET 
    DX and ToolsRecommInit.Dec'10Ret1/2/13201312-NovYTD3/31/14YTD 
                 
    AbaxisABAX2/2/091526.857937.836.735.45-4.4538.88-2.5 
    CardioV.Sys.CSII11/5/107.1511.66631329.729.513531.79-7.3 
    CepheidCPHD10/23/1231.4new 35.51341.972451.588.4 
    Exact SciEXAS12/10/105.65.986.8113611.528.7814.1721.3 
    GenomicHGHDX2/26/1328.5  27.246.334.4526.526.3410.3 
    GenProbeGPRO2/2/094558.3530acq      
    HologicHOLX*4/9/1321.6  20new20.512.521.5-3.8 
    IlluminaILMN2/2/092963.3411855.481.896.5273.6148.6625.2 
    AlereALR2/2/092536.64619-17.733.5781.534.35-3.9 
    NeoGenNEOG7/2/102641.035845.648.846.783.2244.95-1.5 
    NanoStringNSTG11/21/1312    11.3new20.6519.7 
    QiagenQGEN3/15/1021.519.55-918.83622.9526.521.09-11.3 
    QuidelQDEL6/16/1012.414.451619.931.324.5531.527.3-11.6 
    ResponseGRGDX2/3/121.5  1.4-12.91.25-101.193 
    SequenomSQNM11/18/093.758.031144.9310.82.29-51.42.453.4 
    ThermoFishTMO**7/25/1253.5new 6544.597.6953120.248 
    VermillionVRML5/15/132.53  1.37732.54922.9525 
                 
    *HOLX acq GPRO           
    **TMO acq LIFE           
                 
                 
                 

    Disclosure: I am long HOLX, RGDX.

    Apr 03 6:29 PM | Link | Comment!
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