Cancer Stocks Weekly Review: Falling with the Market
by Alan J. Brochstein, CFA
AB Analytical Services
The post-ASCO hammering, which has been almost unabated, continued this week, with the median return of the group now -8% on the year thus far. The AMEX Biotech Index (BTK) is still up about 2%. The lists below, with data from StockVal, are comprised of domestic companies primarily with market caps in excess of $50mm, ranked by the return this past week. If the reader believes that there are erroneous inclusions or exclusions, feel free to let me know.
In an absolutely horrible week for the market overall, the median decline of -4.4% was actually about 0.4% stronger than the S&P 500. The average decline of -4.9% was in line with the overall decline. While it might seem immune from the developing problems that are related to housing woes and a rapidly spreading commercial credit crunch, the group, one must remember, is predominated by companies that frequently access public equity markets (debt sometimes too) for funding. In times like these, it is worthwhile remembering that capital isn’t always available. In other words, perhaps, for now, one should be focusing on companies that are profitable
STRONG
Trubion (TRBN) was the only double-digit gainer on the week. Oddly, there
didn’t appear to be any news. TRBN conducted its IPO late last year at $13 and is now up from its $18 close at year-end. The company’s lead product is not cancer-related (rheumatoid arthritis), though its second product under development does address NHL and CLL. Tomotherapy (TTPY), while not a double-digit gainer, was certainly well ahead of the market. This recent IPO offers a specialized radiation treatment machine (over 125 installations) and continues to gain clients for its Hi-Art system. My understanding is that the Hi-Art has certain applications but can’t be used as broadly as an IMRT or IGRT machine. Finally, Onyx (ONXX) had a decent week, relatively speaking. This stock rocketed in February when Bayer announced positive news on Nexavar (treats liver cancer) and has been consolidating recently. Nexevar was submitted to the FDA in late June. ONXX sold 6mm shares at 28 in June, so clearing that level would be nice.
WEAK
Spectrum Pharma (SPPI) continued its plunge subsequent to the FDA questioning one of its lead drugs, prostate cancer pill Orplatna. The stock had done well following
its May equity sale at $6.25 that raised $30mm. While the news was disappointing, the company’s pipeline appears diverse and their finances in great shape. My comment last week about support at $5 was clearly not helpful, but I will offer that the $4 area has the potential to hold as well. Immunomedics (IMMU), which has been selling off since April, fell despite no apparent catalyst. There appears to be some support between 2.50 and 3.00. Immunogen (IMGN) lost a senior executive this past week, but, more importantly, has an open shelf filed recently for $75mm. This one looks like $4 is coming
The two screens below attempt to focus the investor on stocks that are working. The momentum list highlights stocks beating the market over the past month and quarter but eliminates those that have had extreme moves. The rebound list highlights stocks that are oversold but showing one-month relative strength without too much one-quarter relative weakness (if at all).
SHOWING MO
Parameters: 4-week outpeformance (S&P 500) of 3% or more, 13-week outperformance of 10% or more and Price Momentum Index of <2
(Note that CYTC and DIGE are in the process of being acquired)
Myriad (MYGN) is one that I wrote about earlier this year. I hope it drops to the 35 area, where it looks like a good entry
POTENTIAL REBOUNDS
Parameters: 4-week outperformance of >5%, 13-week underperformance of <5% and Price Momentum Index of <0.
For the record, I am not a fan of Radiation Therapy Services (RTSX), which is subject to both reimbursement risk as well as competitive threats. Celgene (CELG) bounced on the heels of a strong earnings report. With that said, though, I would be very cautious on the name, as I expect that it could get dragged down in the market sell-off.
Disclosure: None, though I am seriously considering buying ACEL after they do a financing
RELATED READING:
- Cancer Stocks Weekly Review: Now Down for 2007
- Cancer Stocks Weekly Review: Lagging Again!
- Cancer Stocks Weekly Review: Tracking the Market
AB Analytical Services is a regular contributor to BioHealth Investor
_____________________
AB Analytical Services
The post-ASCO hammering, which has been almost unabated, continued this week, with the median return of the group now -8% on the year thus far. The AMEX Biotech Index (BTK) is still up about 2%. The lists below, with data from StockVal, are comprised of domestic companies primarily with market caps in excess of $50mm, ranked by the return this past week. If the reader believes that there are erroneous inclusions or exclusions, feel free to let me know.
In an absolutely horrible week for the market overall, the median decline of -4.4% was actually about 0.4% stronger than the S&P 500. The average decline of -4.9% was in line with the overall decline. While it might seem immune from the developing problems that are related to housing woes and a rapidly spreading commercial credit crunch, the group, one must remember, is predominated by companies that frequently access public equity markets (debt sometimes too) for funding. In times like these, it is worthwhile remembering that capital isn’t always available. In other words, perhaps, for now, one should be focusing on companies that are profitable
STRONG
Trubion (TRBN) was the only double-digit gainer on the week. Oddly, there
didn’t appear to be any news. TRBN conducted its IPO late last year at $13 and is now up from its $18 close at year-end. The company’s lead product is not cancer-related (rheumatoid arthritis), though its second product under development does address NHL and CLL. Tomotherapy (TTPY), while not a double-digit gainer, was certainly well ahead of the market. This recent IPO offers a specialized radiation treatment machine (over 125 installations) and continues to gain clients for its Hi-Art system. My understanding is that the Hi-Art has certain applications but can’t be used as broadly as an IMRT or IGRT machine. Finally, Onyx (ONXX) had a decent week, relatively speaking. This stock rocketed in February when Bayer announced positive news on Nexavar (treats liver cancer) and has been consolidating recently. Nexevar was submitted to the FDA in late June. ONXX sold 6mm shares at 28 in June, so clearing that level would be nice.WEAK
Spectrum Pharma (SPPI) continued its plunge subsequent to the FDA questioning one of its lead drugs, prostate cancer pill Orplatna. The stock had done well following
its May equity sale at $6.25 that raised $30mm. While the news was disappointing, the company’s pipeline appears diverse and their finances in great shape. My comment last week about support at $5 was clearly not helpful, but I will offer that the $4 area has the potential to hold as well. Immunomedics (IMMU), which has been selling off since April, fell despite no apparent catalyst. There appears to be some support between 2.50 and 3.00. Immunogen (IMGN) lost a senior executive this past week, but, more importantly, has an open shelf filed recently for $75mm. This one looks like $4 is comingThe two screens below attempt to focus the investor on stocks that are working. The momentum list highlights stocks beating the market over the past month and quarter but eliminates those that have had extreme moves. The rebound list highlights stocks that are oversold but showing one-month relative strength without too much one-quarter relative weakness (if at all).
SHOWING MO
Parameters: 4-week outpeformance (S&P 500) of 3% or more, 13-week outperformance of 10% or more and Price Momentum Index of <2
(Note that CYTC and DIGE are in the process of being acquired)
Myriad (MYGN) is one that I wrote about earlier this year. I hope it drops to the 35 area, where it looks like a good entry
POTENTIAL REBOUNDS
Parameters: 4-week outperformance of >5%, 13-week underperformance of <5% and Price Momentum Index of <0.
For the record, I am not a fan of Radiation Therapy Services (RTSX), which is subject to both reimbursement risk as well as competitive threats. Celgene (CELG) bounced on the heels of a strong earnings report. With that said, though, I would be very cautious on the name, as I expect that it could get dragged down in the market sell-off.
Disclosure: None, though I am seriously considering buying ACEL after they do a financing
RELATED READING:
- Cancer Stocks Weekly Review: Now Down for 2007
- Cancer Stocks Weekly Review: Lagging Again!
- Cancer Stocks Weekly Review: Tracking the Market
AB Analytical Services is a regular contributor to BioHealth Investor
_____________________
posted by Nico at
5:59 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home