Despite some additional M&A news the sector is off to a weak start. I suspect this eventually reverses today but would also take it as a strong signal if we remain weak or weaken further throughout the day. 1. It seems like only the day before the abstract release that I was talking about larger […]
November 4 Biotech Update
The sector certainly seems to be getting it legs back. The SMID are finally starting to get a bid (even if it is partly driven by short covering but it has to start somewhere). In addition, earnings have been good and now we are entering a period of both data catalysts and a seasonally positive […]
November 2 Biotech Update
We finally get a merger Monday of sorts although only one of the deals is a public company. It will be telling to a certain extent how the SMIDs respond to the deals. I (and many others) thought that we need a pickup in M&A to spark additional interest in the space as well as […]
October 29 Biotech Update
As I noted before, it appears that the sector is improving and while I would not say it has turned, I would argue that the odds are better that the next large move will be higher rather than lower. This would especially be the case if we start to see M&A pick up. The potential […]
October 28 Biotech Update
The sector seems to be getting its feet but unevenly and in fits and starts. It looks like the large caps are probably the most consistent outperformers with some strong SMID names but as a group it is much more mixed. We continue to be in earnings seasons and likely explains the outperformance of the […]
October 26 Biotech Update
I really thought the week would start with more of a bang but it seems much more like a whimper. Sure we had more VRX news/speculation but we really did not learn anything that new. The bears are bears and the bulls are hiding and most have no clue what exactly is going on. The […]
October 23 Biotech Update
Unfortunately, the discussion for the sector continues to revolve around specialty pharma. This has brought the sector down (although perhaps not down as far as we would have thought, so perhaps that is a positive) and generated significant underperformance to the broader market. At some point, the negative headlines for the sector will end and […]
October 21 Biotech Update
The sector continues to be under pressure, although we seem to be staying above the recent lows which remains critical. We are entering earnings season and it will be interesting to see if earnings without M&A is enough to spark buying. My base case is good earnings will be enough to stop the decline but […]
October 19 Biotech Update
Another slow start to a week with expectations of merger Mondays once again dashed. The only real news was the VRX earnings, which is where we will focus today. VRX is one of many earnings that we will analyze to see not only how the fundamentals of the sectors perform but also how the stocks […]
October 16 Biotech Update
Some interesting news that I want to focus on today. It seems that sentiment is finally starting to turn as the sector is rallying even though we have some less than bullish news events. Obviously every recent rally has been sold, so it will take some time before we can get comfort that the pattern […]
October 14 Biotech Update
I am not sure if the sector sold off yesterday as simply a normal short term move or whether there were real concerns about the democratic debate. I suspect a portion of the selling was likely related to the debate, which is silly as I have noted before politicians have moved on from the pricing […]
October 12 Biotech Update
Another start to the week and another week without the M&A that many think is needed to move the sector higher. I worry a little about that argument as one would like to see the sector move higher off of fundamentals and not adding more and more takeover premiums into stocks. That being said I […]
October 9 Biotech Update
I would say after yesterday that the sector looks a little better but I think more to the point it seems that volatility is the best word that describes the trading action. The biased bull in me sees this volatility as slowly healing the charts and putting in a bottom. The bear in me sees […]
October 7 Biotech Update
So I think the sector told us what direction it wanted to move. We are getting to dangerous territory for another large leg downward. It does not help in the short term that oil seems to have bottom, which is likely making the energy sector a more attractive near term place to put money given […]
October 5 Biotech Update
Today is going to be a nice tell for the sector. We essentially have a positive market backdrop but more importantly competing headlines. There is the continued pricing discussion highlighted by high profile VRX articles in the New York Times and then the positive data from ONCE. If the sector can shrug off the pricing […]
October 2 Biotech Update
Just when it seemed like the market could have been getting its footing we have the weak jobs report and we are back to a macro driven sell off. I think down continues to be the near term trend until proven otherwise. I am looking at both the VIX and put/call ratios and think they […]
September 29 Biotech Update
I want to get out a quick note this morning as I am not sure I will have time for my usual Wednesday note and there has been some interesting news. The biggest issue remains the macro and the selloff in the sector. This is beyond weak hands and this is the liquidation of large […]
September 28 Biotech Update
The market has been ugly and rough and at times like this you simply want to throw up your hands and walk away but this is where values develop, so it is worth staying engaged even if we are not at the bottom. I think it is a legitimate question as to whether we are […]
September 25 Biotech Update
The sector continues to get hit with the broader market. It feels like the sector is still facing the headwinds from the pricing discussions but as it fades into the background, the headwind will lift. Of course, it has to fade into the background and that remains an open question. My base case remains that […]
September 23 Biotech Update
The sector and market have been hit hard in recent days and, at least for the sector, it comes down to drug pricing discussions. Drug pricing occasionally comes up as an issue and you have to expect that as long as it is part of the narrative it is going to be a headwind for […]
