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Trading Biotech Stocks – Is There Any Momentum Left?

The healthcare sector (XLV) is trading at 2024 lows, down 11% over 3 months while many SMID biotech stocks peaked in early November.

Many SMID biotech stocks in our momentum driven “Trading List “have done well but the XBI is down over 8% in 3 months.

Seasonality still favors SMID and MEDtech stock picks through early January. Select large cap biopharma are strong holds: ABBV, LLY, VRTX.

It’s not a bear market for biotech yet it just feels that way because recent trends are down and healthcare stocks are not a stabilizing force. Moreover the backdrop of interest rates increasing since the Fed Meeting last week with the 10 year yield back above 4.5% Layer on that is the uncertainty caused by geopolitical turmoil and a new TRUMP 2.0 Administration in the U.S. .Some well known large cap biopharma stocks have already made a correction over the past six months: Merck (MRK) down 24%, Vertex (VRTX) down over 11% in one month and Regeneron (REGN) down 32%. Even ABBV took a hit. And the major catalyst for the recent sell-off was the killing of the United Health CEO and “backwash” criticism of our healthcare system. The large cap weighted IBB is down 4% in one month.So if you still believe in health science innovation you have got to find winning trades in small and mid-caps (SMID) life science stocks. We have covered this trade in the past so let’s recap by reviewing our previous posts on SMID life science trades. We have updated our list below as of last Fridays’ close. Although many of the trades were profitable the real objective is to find long term winners not so easy in biotech. Here are several winners YTD despite the recent sell-offend keep in mind the bellwether XBI  at $91.54 is only up 2.53% YTD. The ARKG is down 27% YTD!

Winners YTD: ADPT up 30%, CPRX up 26%, CRMD up 127%, CRNX up 51%, EXEL up 38%, GERN up 92%, GH up 17%, NTRA up 158%, NVAX up 81%, QDEL up 39%, SUPN up 22%, TWST up 30%, VCEL up 58%, VCYT up 8%.

Some of these stocks should be removed from the list but some are still tradable despite the  volatility like CRBU, DNLI, PACB, TEM. Others will probably be cut: EVH, IMTX, TXG.

The MEDTech sector should do better in 2025  with improved earnings and a little bounce from M&A. The IHI was up 9% YTD.

A surprising result was the severe sell-off in Life Science Mutual Funds some of it is because of dividend pay outs and overweight in UNH. PRHSX down 9% YTD. JNGLX down 1.61% YTD. We need to look at results in the funds more detail.

There is a lot to unpack here and I dont want to get too positive because trading SMID biotechs that don’t have earning growth is very difficult. But there is plenty of interest in biotech and a lot of speculative money around. If we get a rotation out of technology and communication service money should come into healthcare and life science investments.Trading today as of 3P EST is mixed with the QQQ up 0.8% and the XBI flat up 0.3%. UNH is up over 1%.LIFE SCIENCE TRADING LIST

                          %YTD %MTD       COMPANY Ticker                               11/13             P       P % P % % MCAP RSI Trend     P 1/20/23 Initial 2/4/23   12/24/23   YTD %   4/8/24 % 12/22/24 YTD MTD $B   u,f,d H                                     Adaptive BiioTech ADPT     4.11   5       2.6 -46.94 6.39 30.41 44.6 0.943 66.6 u6.5 Acumen Therap ABOS     5.29   3.57   -33.89   3.17 -17.45 1.85 -51.8 -21.9 0.111 65.4 d4.5 Avidity Sciences RNA new 7/1/24             25   31.8 251 -27.1 3.8 31 d56 Bridge BIO Pharm BBIO new 11/30/24 27               26.49 -34 5.71 15 49.75 f24.3 Catalyst Pharma CPRX     16.1   16.58   -10.86   14.89 11.42 21.3 26.53 0.57 2.54 56.8 d8.33 Caribou Biosci CRBU     6.29   6.17   -0.175   3.71 -35.25 1.8 -68.6 -8.16 0.163 41 d7.79 CorMedix CRMD         3.9       5.31 41.22 8.57 127.9 -20.2 0.52 52.68 d13.85 Crenetics CRNX                 42.12 18.38 53.6 53.6 -4.41 5.05 62.5 f11/8 CRSPR Therap CRSP 49.61 -25 55.27   63.67   56.63   53.91 -13.88 40.72 -34.95 -13.84 3.48 37.7 d90.62 Cryoport CYRX 21.75 -42.34 25.24   16.09   -7.26   16.38 5.75 7.86 -49.3 -19.63 0.388 45.2 d15 Cytokinetics CYTK         31       65.34 -21.74 48.87 -41 -2 6.03 41.81 d85.6 Denali DNLI     22           19.21 -9 21.45 – -12.16 3.09 42 d25.05 Exelixis EXEL     22.25           23.75 -1.21 33.29 38.77 -3.93 9.51 62.11 u36.45 Evolent Health EVH 30.83 13.74 31.96   32.08   14.25   27.65 -16.29 11.41 -65.4 -0.9 1.3 29.26 d32.5 Geron GERN 3.19 9.24 3.22   2.29   -5.37   3.79 79.62 3.49 92.9 3 2.01 39.89 d5.34 Guardent Health GH 11/6 25                 31.67 17.08 3.23 3.91 56.77 u 36.87 Humacyte HUMA new* 8/1/24 8.25               4.64 63.4 5.22 0.597 4.34 d9.97 Ilumina ILMN new* 10/4/24 143               136 0.42 3.3 21.6 51 f151 Intelllia NTLA                 25.5   12.18 -60 -7.18 1.25 34.85 d35 Immatics IMTX     9.3   9.9   13.66   10 -4.94 6.85 -60 (7.160 1.24 29.95 d13.70 Natera NTRA         60       91.66 46.33 161.88 158.4 -3.57 2.1.4 71.64 u169.5 Pacific Biosci PACB 11.29 55.68 11.58   8.59   5   1.47 -85 1.97 -80 14.53 0.58 46.44 d10 Novavax NVAX                 3.67 – 8.7 81 7.94 1.6 43.6 d18 Protagonist Thera PTGX new 12/12 41               41.49 80.9 2.07 2.59 51.22 f45.32 Quidel-Ortho QDEL new 9/16/24 44               44.84 39.16 19.64 3.14 53.9 d74 Recursion Pharm RXRX         10.75       8.12 -17.65 6.03 -38.8 -12.38 -0.17 44.28 d15.52 Rezolute RZLT   7/8/24 4.25               4.39 342 -12.38 0.254 44.25 d12.81 Roivant ROIV         11.4       11.03 -1.78 11.57 6.55 2.94 8 49.29 f11.99 Supernus SUPN 40.3 12.3 41.61   29.23   -18.05   30.07 3.9 35.43 22.43 -1.91 1.96 57.23 u37.83 Tempest AI TEM new 7/10/24 52               35.5 -11.7 -38.9 5.6 57.23 d77.56 Twist Biosci TWST     18   3.76   34.03   31.54 -14.53 47.94 30 16.61 2.85 53.58 u58.8 10x Genomics TXG     47.84   56.58   55.27   27.59 -50.79 14 -75 5.41 1.7 33.27 d56                                     Vericel VCEL     31   34.75   31.93   46.05 29.32 56.5 58.7 -1.33 2.9 73.99

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Veracyte VCYT 24.89 39.43 26.67   28.27   19.13   39.6 -29.81 40.89 48.64 4.31 3.06 66 u41.32 Wave Life Sci WVE new 10/26 14.45               13.51 167.52 -5.26 2.06 61.31 u 13.81                                                                         ArkGenomics ARKG     35.28   32.81   16.22   23.18 -29.35 23.68 -27.83 -1.37   45.25 d27.24 SPDR Biotech XBI 86.99 14.75 90.39   87.62   5.57   83.49 -6.51 91.28 2.23 -1.95   44 d107                                     iShares BIO IBB         133.77   -1.89   132.51 -2.48 132,73 (2,30) -1.59   34.73 d149 HealthcareSPDR XLV         135.02   –   143.22 5.02 138 1.19 -3.42   30.4 d157 iShares MedTEch IHI         53.65   57.3   6.17 58.81 58.81 8.97 -1.9   40.82 d61.20                                                                                                             T.RowePrice PRHSX         86.84   -3.32   92.49 5.22 79.93 -9.07 -14.75       FidoSelBiotech FBIOX         1763           19.1 7.12 -3.88       FIdoMedTech FSMEX         61.77       64.23   62.81 1.37 -6.59       JANUS Life Sci JNGLX                     68.02 -1.61 -9.39

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