Large Cap Biopharma Buffeted By Big Gov, Choppy Days Ahead
Image Source: Unsplash
Large Cap Biopharma Buffeted by Big Gov Fighting Big Pharma
- Momentum in Tech Easing but with hope for a broader rally.
- Earnings coming Up in July Needs to Support High Multiples.
- Innovation is strong for Diabetes and Immunology
As you may know by now, the U.S. Government is being sued by Merck and the PhRMA on drug pricing legislation that gives Medicare the power to negotiate drug prices. This battle started with the Inflation Reduction Act (IRA) and has had a significant negative impact on stock prices. This is on top of legal actions by the FTC blocking the acquisition of Horizon Therapeutics by Amgen. Today as of 2P EDT. Today most of these stocks are in the red except Regeneron and Vertex which had positive news on their Type 1 Diabetes cell therapy. Diabetes has had several breakthroughs with LLY and VRTX potentially.
After a huge run-up in stocks since January investors have come to realize that most of the gains have come from the so-called “Magnificent Seven” tech stocks: AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA. And despite increases in interest rates from the Fed inflation is still high enough with strong demand for jobs to consider another quarter-point raise in July. And we still have an indeed yield curve with the 2-year at 4.75%.
We would like to see an expansion of leadership in the market especially given all the government stimulus. Today we see a weaker tech market but some gains in industrials, energy, materials, and real estate. One of the issues with life science stocks could be that the tech rally particularly AI has so much momentum that it has drained funds and enthusiasm for other plays.
Healthcare has lackluster performance down 2.83% YTD but UNH looks like a bottom. Traders prefer the innovation and newsy plays of the XBI up 2.55% YTD. Performance leaders in order for 2023: LLY, VRTX, AZN, MRK, REGN.
Prices as of 6/24.
| Company | Ticker | Price | Price | Price | Price | MktCap | % Perf | |||||||
| 1/15/18 | 3/31/23 | 11/1/19 | 6/24/2023 | 2023 | 1 yr | FWD | Analyst | % | 52 week H | YTD % | ||||
| $B | P/S | PE | Recom | Div | ||||||||||
| Abbvie | ABBV | 100.000 | 159.37 | 81.75 | 135.92 | 239.8 | -9 | 4.21 | 12.27 | 2.4 | 4.36 | 168.11 | -15.9 | |
| Alexion*(ALXN) | ALXN | 123.000 | 182.5 | 109.38 | – | 40.33 | n/a | 4.56 | 9.38 | 2.2 |
*acquired by AZN |
|||
| Amgen | AMGN | 185.000 | 241.75 | 221 | 227.11 | 121.35 | -6.57 | 4.58 | 12.05 | 2.7 | 3.75 | 296.67 | -13.53 | |
| AstraZeneca* | AZN | 35.000 | 69.41 | 40.34 | 72.12 | 214.3 | 11.9 | 5.1 | 16.89 | 1.8 | 2.01 | 76.56 | 6.37 | |
| Biogen | BIIB | 336.000 | 278.31 | 299.2 | 284.52 | 41.18 | 34.6 | 4.08 | 17.32 | 2 | – | 319.76 | 2.74 | |
| Bristol Myers* | BMY | 63.000 | 69.31 | 57.16 | 65.04 | 136.64 | -16.28 | 2.99 | 7.98 | 2.4 | 3.29 | 81.44 | -9.6 | |
| Celgene* (BMY) | CELG | 106.000 | n/a | 108.53 | – | 77 | n/a | 4.69 | 8.7 | n/a |
*acquired by BMY |
|||
| Gilead Sci | GILD | 79.000 | 82.97 | 61.69 | 77.47 | 96.63 | 23.79 | 3.55 | 10.77 | 2.5 | 3.87 | 89.75 | -9.76 | |
| GlaxoSmithK* | GSK | 38.000 | 35.58 | 45 | 36.38 | 71.58 | -14.9 | 2.02 | 9.07 | 2.8 | 4.02 | 44.75 | 3.53 | Haleon spinout |
| Eli Lilly | LLY | 85.000 | 343.42 | 113 | 458.84 | 435.56 | 46.73 | 15.57 | 37.42 | 2 | 0.99 | 462.26 | 25.42 | |
| Merck | MRK | 59.000 | 106.39 | 78 | 114.6 | 284.24 | 24.57 | 4.91 | 13.47 | 2 | 2.59 | 119.69 | 3.29 | |
| Pfizer | PFE | 40.8 | 38.3 | 217.16 | -23.34 | 7.55 | 10.93 | 2.4 | 4.28 | 54.93 | -25.25 | |||
| Regeneron | REGN | 367.000 | 821.67 | 310.48 | 779.73 | 85.43 | 28.37 | 6.91 | 18.02 | 2.1 | – | 837.55 | 8.07 | |
| Vertex | VRTX | 158.000 | 315.07 | 196 | 347 | 89.25 | 22.4 | 9.57 | 21.68 | 2.1 | – | 354,46 | 20.16 | |
| 3/31 | 11/19 | 6/24 | %YTD | 1 yr | 12 mo hi | |||||||||
| XBI | 76.21 | 93 | 85.12 | 2.55 | 11.66 | 95.18 | ||||||||
| IBB | 129.16 | 119.65 | 128.5 | -2.13 | 8.89 | 138.74 | ||||||||
| FBIOX | 15.63 | 20.26 | 16.83 | 3.38 | 14.88 | 17.44 | ||||||||
| PRHSX | 87.75 | 79 | 90.41 | 0.66 | 6.25 | 95.26 | ||||||||
| XLV | 129.46 | 121.11 | 132 | -2.83 | 3.86 | 141.77 | ||||||||
| XPH | 41.01 | 39.47 | 41.28 | 0.81 | -1.01 | 46.61 | ||||||||
| UNH | 472.59 | 252 | 477 | -10 | -4.56 | 558 | ||||||||
| QQQ | 320.93 | 201.23 | 362.54 | 36.15 | 27.27 | 372.85 |
More By This Author:
Biotech And Healthcare Stocks Lagging
Macro Muddle Coming Up As Market Exceeds Expectations, Small Caps Gain Ground
Market Mixes It Up With A Broad Rally
Disclosure: Long ABB, AZN, BMY, GILD, LLY, MRK, REGN, and VRTX.
Comments
