Tuesday 12:45pm EDT Update on a red screen day:
Healthcare lags down 1.6%, biotechs now being crushed IBB down 3.1%,XBI down 5%!
Look for Value +Growth Picks in a Biotech Bear Market
Marijuana Strengthens Clinical Status
Review our assumptions from previous posts:
- Biotech remains in a bear market so sector plays may not work.
- Stock picking and trading are the favored tactics in this market.
- New portfolio picks are larger caps for safety and growth (ABBV,BMY,GILD) and one speculative pick with a strong balance sheet and potential breakthrough technology in gene therapy (BLUE).
Today' Movers with the IBB flat at $261.44 and XBI up 1% at $51.82:
Epidiolex a marijuana related compound showed positive results in the treatment of Dravet syndrome, a rare and severe form of epilepsy in children with no FDA treatments.Primary endpoint shows a reduction in convulsive seizures compared with a placebo in a randomized study with 120 patients. The Company is based in London and has strong funding with over $300M in cash as of last filing. The stock is still down 11.45% over 12 months with a 52 week high of $133.98.
The mid-cap biopharmaceutical sector is one of the most important for overall health of biotechnology because of broad pipelines, strong balance sheets and potential for M&A. One of the top Companies in the sector Alnylam Pharmaceuticals (NASDAQ:ALNY) soared 5.8% on dosing news for its Phase 1 Fitusiran Hemophila drug.
Other major mid-caps were mixed but Seattle Genetics (NASDAQ:SGEN) was up 1.32% to $33.80 however Anacor Pharamceuticals (NASDAQ:ANAC) soared 5% to $66.74 but still off its 2015 high of $156.93. ANAC got a boost from Jeffries on a research report because of its small molecule boron chemistry platform,
Large Caps Sluggish
The leader among the large caps was Gilead Sciences (GILD) up 1.39% to $90.46. Celgene (NASDAQ:CELG) was the biggest loser down 1.83%. Gilead Sciences our top pick among the large caps and UBS analyst Matthew Roden agrees because of valuation and PEG at 1.43.
Many of our previous smaller cap picks were movers (GERN,RXDX) today but we would be reluctant to reiterate new buys until the XBI breaks through recent resistance.
Disclosure: I am/we are long ABBV, BLUE, GILD.