5 Biotech Stocks That Are Vulnerable This Year
Despite reports proving the stock market moving up at the at the start of the year, the U.S. equities market seems to be far more mixed, with healthcare stocks looking particularly volatile.
Anthony Mirhaydari, writing for InvestorPlace, explained, “Biotech, in particular, is getting hit after a 10% plus rally out of the mid-November low for the iShares Biotech, threatening to move below its 20-day moving average. That would set up another retest of its 200-day moving average down near $104, which would be worth a decline of around 4% from current levels.”
Mirhaydari has taken a look at five biotech companies investors might consider selling while their stocks are high.
First up is Biogen. Yesterday, the company reported a drop in their stocks to the bottom of the S&P 500, therefore losing 3.7% of value.
“Biogen shares are falling away from overhead resistance near $350 associated with its mid-October high. Watch for a move back to the October-December consolidation range near $310 which could set up a nice buying opportunity for another breakout attempt.”
Shares are currently trading for $332.16.
Next up is Regeneron Pharmaceuticals. Regeneron and Paris-based Sanofi revealed that they would invest another $1 billion into combination with others in advanced skin cancers, non-small cell lung cancer, cervical cancer and lymphomas.
The companies commented, “The investment in cemiplimab will be increased to $1.64 billion, an increase of approximately $1 billion over the initial 2015 agreement and Sanofi and Regeneron will continue to equally fund cemiplimab development.”
Company stock is “moving lower once more, capping a downtrend going back to July that’s totaled more than 30%. This pushes shares back into a consolidation range going back to 2016 near $360, a level should hold.”
Regeneron shares are currently trading for $375.72.
At the end of last year, Alexion announced that Japan’s Ministry of Health, Labour and Welfare (MHLW) approved Solirisi (eculizumab) to treat patients with generalised myasthenia gravis (gMG) who are anti-acetylcholine receptor (AChR) antibody-positive and whose symptoms are difficult to control with high-dose intravenous immunoglobulin (IVIG) therapy or plasmaphersis (PLEX).
It’s worth noting that analysts Raymond James recently downgraded the company from “Strong Buy” to “Outperform.” This appears to be because after three months of moving upward, the company’s shares appears to be slowing. At present, their stocks are currently trading for $121.23.
However, although Celgene presented unaudited 2017 results at the J.P. Morgan Healthcare Conference, with overall good results, reporting a 57% year-over-year increase in earnings per share, analysts feel their reports are mixed. This could largely be due to the company’s overreliance on Revlimid for about two-thirds of its sales.
Mirhaydari noted, “The company will next report on 25 January before the bell. Analysts are looking for earnings of $1.93 per share on revenues of $3.5 billion. When the company last reported on 26 October, earnings of $1.91 beat estimates by four cents on a 10.2% rise in revenues.” Shares are currently trading for $104.61.
Last on the vulnerable list is Amgen. On 5 January, the U.S. Food and Drug Administration (FDA) approved the company’s supplemental Biologics License Application (sBLA) for Xgeva (denosumab) for the prevention of skeletal-related events in patients with bone metastases from solid tumours to include patients with multiple myeloma.
Although stocks are holding steady, Mirhaydari concluded that they “are vulnerable to a decline to the 200-day moving average near $170, which would be worth a decline of roughly 6% from current levels-continuing a sideways channel near current levels that’s been in place since late 2014.”
Their trades are currently trading for $181.87.