JPMorgan Healthcare Day One Notes: Weak Start Despite Positive Updates

Weak Start for Biotech Stocks on 1/8/18-Red Screen Day

Positive Updates on BIIB CELG GILD etc

Biotech ETFs Firm Up about 1.5% Tuesday AM JPMorgan Healthcare Conference

Biotech stocks abruptly sold off at the market open yesterday with the XBI down 2% to the $85.31 level and the IBB down 1.33% to $108.37. Apparently, the 9000 attendees of the 2018 J.P.Morgan Healthcare Conference who crammed into the presentations had little time to buy stocks. Or maybe the robots took over at the opening selling on impending news for the Conference and the technical resistance that was hit last week. But the selling soon abated and major indices were off their lows. Biotech stocks should do better today as updates from major companies are digested. General stock indices were also flat for the day.

As of early Tuesday, trading biotech stocks were primarily in the green. We sat in on presentations for some of our focus stocks in the Rayno Biopharma Portfolio and we were encouraged by the updates. Here are some quick notes on what we heard and current trading prices:

Biogen, Inc. (BIIB) $336 up 2%. The CEO Michel Vounatsos gave a strong presentation on the big opportunities in neuroscience and brain diseases with a leading MS market position of a $9.8B core business and an overall Revenue CAGR of 14% and a 20% CAGR for EPS.The Company has $2.3B in cash flow to fund new programs in Alzheimer Disease, IPF, stroke, MS and other neurological diseases. Financial results will report on 1/25.

Celgene (CELG) $105.35 up 1%. CELG stock has been under pressure lately after revised 2018 guidance in December and a recent downgrade by Bernstein. We added the stock to the Portfolio in November at $102. The Company announced the acquisition of Impact Biomedicines with lead compound fedratinib a novel therapy for myelofibrosis and hematological malignancies in a milestone deal worth about $7B. Celgene has a broad pipeline for multiple myeloma and leukemias (AML) with its blockbuster product Revlimid. The Company also has partnerships with innovative companies such as bluebird bio for CAR-T therapies and Juno Therapeutics for NHL.

Gilead Sciences (GILD) $76.84 up 3.20% above resistance and the SMA 50 level. Gilead Sciences recently merged with Kite Pharma so this was the first update of its pipeline including 5 KITE programs. The Company is expanding beyond its leadership position in HIV and HCV therapies with. a broad pipeline in hematology and oncology. In inflammation its JAK1 (Filgotinib) inhibitor in Phase 3 with data expected early this year.GILD is one of the top performing large caps in 2018 YTD.