We need leaders and we need to stop the bleeding among the losers, and I see some nascent leadership and a tourniquet being applied to some of the wounded warriors.
Today we are getting some much-needed bounceback in biotech. We know, for example, that Gilead's (GILD) been a battleground, but have you seen how the stock of that company, which trades at 12 times earnings, hasn't been able to get through $100 on the downside? I like that.
Biogen (BIIB)? What can I say? This $100 billion company that's got a burgeoning Alzheimer's franchise isn't about to quit. I've been reading Michael Yee's excellent biotech research for RBC Capital Markets -- a perfect companion to Adam Feuerstein's work on TheStreet.com -- and he points out that there's some Alzheimer's data coming out on March 20. That's sure to continue to catalyze the stock.
Celgene (CELG) has been under pressure of late, but it looks like, for the moment, pressure is letting up. As always, it is related to some sort of patent challenge to its cancer drug Revlimid, and all I can say is that CEO Bob Hugin has assured you not to worry about these challenges, and he's been right on the money. Has the dip ended? Sure seems like it.
Regeneron's (REGN) been stalled even as it keeps winning head-to-head trials with Eylea, its macular degeneration drug that's being extended to those with diabetes. Please stay focused on what could be the next blockbuster, which is the novel anti-cholesterol drug that many of the cardiologists are buzzing about.
Now, we have a couple of emerging companies that have been acting quite well, including Biomarin (BMRN), just a point off its high as it traverses from orphan drug company to a full-fledged major pharma company. I expect the same of Isis (ISIS), which I know has its detractors but I am sticking with it because of its bountiful pipeline, most importantly its novel anti-coagulant. Every time I see something positive about a trial, it seems as if people pick on some negative aspect. I get that. It is heavily shorted, with 12% of the float sold short, but I have lots of faith in CEO Stan Crooke to deliver.
Notice the persistent takeover talk around Pharmacyclics (PCYC) because of its partnership with Johnson & Johnson (JNJ). It almost can't be killed. I would prefer not to buy it up here, but others aren't so chary.
I would prefer you to buy the amazing Receptos (RCPT), where we are seeing world-beater data for its Ozanimod drug for both ulcerative colitis and Crohn's disease. You are talking about $8 billion in potential sales for the combined indications.
Finally, Alkermes (ALKS) has backed off a couple of point from its 52-week high on the spiking of a potential pain blockbuster, but people are overlooking some terrific anti-depression results that I think make this one a steal even up here. That's been a winner any time it has broken down, and I think this time will be no different.
Can biotech lead us out of the morass? Not alone, no. However, it's been a leadership group ever since the bottom, and with Actavis (ACT) and Valeant (VRX) doing so well after acquisitions that they have made, I can only say there are a lot of ways to win here, a takeout on the medium-size companies and out-year earnings power for the large companies.
Oh, and one last thought: If February is as weak as I think it was in this country, this group will only gather steam in the next few weeks as the data stream out from a very chilly month's worth of business.
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