Biotech Life Science Trades: Small Caps Are Lagging But Poised For A Q4 Rally

By Rod Raynovitch of Raygent.com
Tuesday, August 13, 2024 4:38 PM EDT

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SMID Life Science Stocks Rally on Weaker Inflation Data

  • SMID stocks are very tradeable and balance sheets look surprisingly good.Volatilty remains high.
  • Weaker than expected PPI up only 0.1% ignite rally with decline in services. Rate cuts imminent for September.
  • Green screen day for SMID sector shows underlying potential of biotechs.

On an active trading day these SMID biotech stocks come to life.  But we are in the peak vacation season with few trade shows or medical meetings so little volume and news to excite traders.  But after the craziness of last week we”ll enjoy the doldrums in here. As you can see from the data below large cap tech stocks have come down with the QQQ up only about 11% YTD while a diversified health sciences FUND like PRHSX is up 10.7% YTD, close to parity.  Even the more defensive large cap healthcare XLV is up almost 10% YTD with much less risk.

SMID Life Science stocks are more volatile of course and the XBI reflects that up only 7% YTD. The IBB has more mixed results but is up 4.65% YTD. We just went through earnings season with many of the Large Cap Biopharmas and they are doing better than technology ETFs as you can see from our previous post, “Port in a Storm”.

We are developing a model for trading these SMID LIFE SCIENCE stocks based on momentum and technicals. We have pre-screened these companies for CASH and ANALYST COVERAGE as well. This is not a “buy and hold list” but a group of companies that have longer term potential for new products and/or M&A. The last column gives some information on our trading results.

The bull case is that even in a weaker economy life science news and dealmaking creates positive sentiment. Update 8/13 3p. A number of reports to today indicate small M&A deals <$5B are picking up. The deals plug pipeline holes and have less FTC scrutiny.

We currently hold the following stocks on our List; ABOS, ADPT. CPRX, CRMD<EXEL.GERN, PACB, TWST, VCEL, VCYT, XBI.

We made profitable trades in the following stocks: GERN NTRA NVAX, TWST, TXG.

We will eventually cull out the companies that are too volatile or have limited upside.

Company Ticker $   P       YTD %     YTD   %YTD %MTD trade cash  
            P       P % P       $M  
                                   
Acumen Therap ABOS     5.29   3.57   -33.89   3.17 -17.45 2.64 -31.25 16.3 H 109  
Adaptive BiioTech ADPT     4.11   5       2.6 -46.94 4.47 -8.78 26.27 H,$ 291  
Avidity Sciences RNA new 7/1/24             25   46.95 418.78 16.3 – 162  
Catalyst Pharma CPRX     16.1   16.58   -10.86   14.89 11.42 18.48 9.93 18.39 H 375  
Caribou Biosci CRBU     6.29   6.17   -0.175   3.71 -35.25 1.94 -66.14 19.75 S,$ 117  
CorMedix CRMD         3.9       5.31 41.22 3.82 1.6 -11.16 H,$ 59  
Crenetics CRNX                 42.12 18.38 47.64 33.9 -1.22 – 116  
CRSPR Therap CRSP 49.61 -25 55.27   63.67   56.63   53.91 -13.88 47 -24.9 -14.57 H 94  
Cryoport CYRX 21.75 -42.34 25.24   16.09   -7.26   16.38 5.75 8.23 -46.87 37.17 H,L 427  
Cytokinetics CYTK         31       65.34 -21.74 55.79 -33.18 1.7 – 1840  
Denali DNLI     22           19.21 -9 22.39 4.33 6.82 – 1350  
Exelixis EXEL     22.25           23.75 -1.21 26.97 12.42 21.76 H 198  
Evolent Health EVH 30.83 13.74 31.96   32.08   14.25   27.65 -16.29 26.4 -20 38.15 S,L 233  
Geron GERN 3.19 9.24 3.22   2.29   -5.37   3.79 79.62 4.7 2.59 2.62 S,H,$ 65  
Humacyte HUMA new 8/1/24 8.25               7.91 178.52 35.1 H 80  
Intelllia NTLA                 25.5   21.46 (29,62) -23.98 H 144  
Immatics IMTX     9.3   9.9   13.66   10 -4.94 11.53 -9.88 -0.48 H 117  
Natera NTRA         60       91.66 46.33 114.57 82.8 4.7 S,$ 813  
Pacific Biosci PACB 11.29 55.68 11.58   8.59   5   1.47 -85 1.59 (83.790 21.37 H,L 76.1  
Novavax NVAX                 3.67 – 11.6 141.67 -2.03 S,H,$ 487.2  
                                   
Recursion Pharm RXRX         10.75       8.12 -17.65 6.29 -36.21 !5.46) S,$ 483  
Rezolute RZLT new 7/8/24 4.25               4.35 338 3.08 S $ 5.93  
Roivant ROIV         11.4       11.03 -1.78 11.12 -0.98 2.68 – 6550  
Supernus SUPN 40.3 12.3 41.61   29.23   -18.05   30.07 3.9 32.1 4.53 13.47 H 52  
Tempest AI TEM new 7/10/24                 39.7 -3.73 12.32 H S$ 479  
Twist Biosci TWST     18   3.76   34.03   31.54 -14.53 53.9 46.26.61 1.91 S,H,$ 289  
10x Genomics TXG     47.84   56.58   55.27   27.59 -50.79 20.43 -63.49 11.95 S,$ 379.8  
                                   
Vericel VCEL     31   34.75   31.93   46.05 29.32 50.11 45.62 -0.98 H 75.8  
Veracyte VCYT 24.89 39.43 26.67   28.27   19.13   19.31 -29.81 29.27 6.4 37.61 H,S4 237  
                                   
SPDR Biotech XBI 86.99 14.75 90.39   87.62   5.57   83.49 -6.51 95.54 7 1.24 H,S,$ –  
iShares BIO IBB         133.77   -1.89   132.51 -2.48 142.17 4.65 2.38 –    
HealthcareSPDR XLV         135.02   –   143.22 5.02 149.98 9.97 3.47 –    
                                   
wildcard                                  
ArkGenomics ARKG     35.28   32.81   16.22   23.18 -29.35 24.53 -22.65 3.01 –    
                                   
T.RowePrice PRHSX         86.84   -3.32   92.49 5.22 96.71 10.73 1.97 H,$    
                                   
                                   
                                   
                                   
                                   
                      –            
                                   
                                   
            12/24/23           8/12/24 %YTD m ytd      
                                   
iShares CoreS&P IJR         108.34   14.48   107.62 -0.58 109.6 1.32 -1.54      
iShares Russell IWM         201.48   15.55   204.45 1.86 205.86 2.55 -3.53      
                                   
NASDAQ-100 QQQ         408.38   53.36   440.47 7.56 453.19 10.7 -8.42      
Fido MED Tech FSMEX         61.77           63.36 2.26 0.19      
                                   
T.RowePrice PRHSX         86.84   -3.32   92.49 5.22 97.33 10.73 -1.1      
iShares MED Dev IHI         53.65   2.05   57.3 6.17 55.79 3.37 -1.19      
                                   
                                   
                                   
                                   
         

More By This Author:

Large Cap Biopharma And Healthcare, A Port In A Storm
Healthcare Stocks Are Coming On Strong In July Led By Biotech
Biotech Bull Market Is Intact But SMIDs Are Too Volatile

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