Market Correction Is Here-IBB at 170 off 2%+ Today,Off 9% from 2013 Highs
The biotech sector sell-off (IBB at $170) continues today despite an effort to rally in the opening (IBB at $178). The biotech sector now tracks the overall market and is no longer immune to macro issues and economic events. Market concerns this week are the volatility and mini-crash of the Nikkei/Yen carry trade, ranting on about i rates going up and "tapering" by the FED, weakness in the financials an important market leader and overall weakness in economic indicators. The biotech sector correction is now more than 5% over 5 days and 9% off the May "bubblet" top. The best biotech mutual fund Fidelity's Five Star (FBIOX $142) is up 29,5% YTD! So investors in biotech are having a great year so we suspect many investors are booking some cash.
Our data base of more than 60 mid-cap companies shows a loss of more than 2% with only a few green stocks and two that interest us are Alkermes (ALKS $29.71) on our focus list and Trius Therapeutics (TSRX $7.85) currently under review. The Rayno Biopharma Portfolio is all red but you should be looking to add Gilead (GILD $50.08) off 4.28%, shares when it stabilizes in the $45-50 range.
ASCO News is obviously not driving biotech stocks today. Celgene (CELG $113) announced FDA approval of an sNDA for Revlimid for mantle cell lymphoma but the stock is off 4%.
Pharmacyclics (PCYC $84) off 4%, a Rayno focus stock and high flyer, is an important player in leukemia therapies such as ibrutinab for CLL.
Yesterday at ASCO the Gynecology Oncology Group (GOG) presented an Abstract that showed that Bevacizumab (Avastin-Roche/Genentech) is the first agent to significantly improve survival in recurring cervical cancer.
While it is too early to summarize the cancer drug winners post-ASCO, the companies that appear to have had the most impact are : BristolMyers (NYSE:BMY), Clovis Oncology (NASDAQ:CLVS), Gilead (NASDAQ:GILD), Merck (NYSE:MRK), and Roche (OTCQX:RHHBY).
Additional disclosure: Hedge positions and raise cash.