Healthcare And Biotech Update With Market At 2024 Highs

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Healthcare and  Biotech Stock Update

  • A diversified portfolio should be developed in  healthcare with biopharmaceuticals, MedTech and speculative SMID caps.
  • The bull market is intact with technology Stocks dominating, but XLV is up 6.89%YTD.
  • Large Cap Biopharmaceuticals are best positioning with ABBV, LLY, MRK but biotech overall (IBB) is trailing.

These are wild times for technology stocks as NVDA and AI continues to excite investors with faster chips and a next generation GPU platform. It’s AI nirvana expected to roll eventually into biotech promising more productive, faster clinical trials and  unique approaches to drug discovery. Until some breakthroughs occur we are left with a biotech market that is trying to come back and healthcare socks racked by the pandemic and harsher government pricing policies. But we have seen significant innovation treatment of obesity and diabetes with the GLP-1 class of drugs introduced by Lilly and NovoNordisk. Sales of the GLP-1 class of drugs have already exceeded $20B and are expected to hit $100B by 2030. But yesterday with a broad market rally we  have sparked optimism with an “AI effect “enabling better productivity in healthcare and faster drug development. tay tuned for breakthrough AI news/

SPY up 8.50% YTD, QQQ up 7.09% YTD, XLV up 6.89% YTD.

Today’s review will focus on where we are in key sectors of healthcare and biopharma stocks.:

Large Cap Biopharmaceuticals

See posted financial metrics and links in major categories.

The large cap sector has been our primary investment focus because of growth plus dividends. Some of these stocks have been hit hard by the Biden Administration’s IRA Inflation Reduction Act  which targets product pricing for 10 drugs that will hit beginning 9/24.

But most of our top picks are outperforming the market YTD : Abbvie (ABBV) up 15.93%,  Lilly (LLY) up 32.57% , Merck (MRK) up 12.09%,  Regeneron (REGN up 9.72%, and Vertex(VRTX) up 2.04%. Two other laggard biopharmas should be considered as speculative buys and both pay dividends: Gilead Sciences (GILD ) and Pfizer (PFE).

SMID Cap Life Science Stocks

Most recently we develop a model based on momentum for this sector with a list of stocks that we hold or trade. They can also be tracked by the larger cap weighedt ETF(IBB) up 0.21% YTD or more preferably the equal weighted XBI up 5.11% YTD. These mid and small cap life science stocks are quite volatile and trail the market YTD. Many stocks in the model have done well and we currently hold a small % in our biotech portfolio. Here are some of the ones we like: CPRX, CRBU, CRMD, CYRX,  EXEL,GERN, SUPN,VCEL But  EVH and HOLX are longer term holds and less volatile.


Medical devices are doing much better in 2024 as tracked by the  iShares U.S. Medical Devices ETF (IHI ) up 6.52% YTD and Fidelity Medical  Technology and Devices Fund (FSMEX) up 8.15%.WE own FSMEX and individual stocks among them : ABT, BDX, BSX, GEHC and SYK.

Another broad approach to medical technology investments is through the T.Rowe Price Health Sciences Fund (PRHSX) up 6.66% YTD.

We are in the late stages of secular bull market so we need another earnings cycle to confirm trends for 2024. But the healthcare sector should be viewed as more defensive compared with technology sector.

More By This Author:

It's A Bull Market But Harder To Pick Small Cap Biotech Winners Because Of Volatility
Healthcare Stocks Are Looking Better But What About Biotech?
Healthcare And Life Science Funds And ETFs Performance 2023-2024

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