The healthcare sector had a flat performance in 2023 due to unique issues. Drug price regulation will be an uphill challenge for the sector this year. Defensive healthcare industry groups should do well during the first half, while biotechnology should shine this year if the 10-year yield remains below 4%. We anticipate the healthcare indexes gaining 5%-10% this year, with some industry groups doing much better. Healthcare Pulse In 2023, the healthcare sector remained in a defensive crouch ending the year with a flat performance while the broader market surged. The sector was a haven fo ..read more

The biotech industry experienced a challenging year in 2023 due to a rising 10-year Treasury yield. In 2024, the 10-year yield should favorably support biotech stocks. Promising advancements in weight loss drugs, neuroscience, oncology, and gene editing treatments offer the potential for biotech growth in 2024. M&A picked up pace in December to its fastest level in 2023. Transaction activity should remain strong in 2024 and well ahead of last year. Biotechnology is well positioned to outperform the broader indexes in 2024, provided the 10-year yield remains below 4%, with potential gai ..read more

Biotech stocks, long burdened by concerns over rising yields, are poised for improvement as the 10-year yield may have peaked, signaling a potential upswing in the industry's fortunes. The recent uptrend in the 10-year yield, peaking around 5% in October, will shift as the Fed adopts a patient stance. Biotech stocks will benefit from a more favorable environment. With the S&P Biotechnology Index trading at 2020 pandemic levels, the potential for a rapid rise exists due to low relative valuations and changing interest rate dynamics. Biotech Pulse For the past year, we have written ab ..read more

Biotech stocks faced challenges in the first half of the year, with the Nasdaq Biotechnology Index losing 3%, compared to strong advances in the broader market. The direction of the 10-year bond yield has become a key predictor of biotech industry performance. Sustaining high yields without triggering an economic slowdown will be a challenge. Strong M&A activity for biotechs has been a bright spot and should further strengthen into the end of the year. Biotechs to perform better later in the year as the yield uncertainty diminishes and prospects for a rate cut next year improve. Bio ..read more

Akero Therapeutics is making strong progress in developing a treatment for NASH, an area of high unmet medical need. The company's lead product candidate has shown promising and highly significant results in Phase 2b trials for NASH, primary and secondary endpoints. Akero Therapeutics' recent Phase 2b expansion cohort study demonstrated that EFX when added to a weight loss agonist delivered significantly improved results. The Q4 readout for the Symmetry Phase 2B extended trial for Cirrhotic NASH and the planned Phase 3 trials in the second half are near term data catalysts. Growing body of ..read more

Biotech stocks have been consolidating recently but may be ready to rally higher due to factors such as a declining 10-year yield and growing M&A activity. Biotech deal-making has been increasing, with large acquisitions such as Pfizer's acquisition of Seagen and Merck's acquisition of Prometheus Biosciences. Biotech valuations remain depressed, but interest in biotechs is growing due to positive trial results and breakthrough treatments. Biotechs are relatively insulated in a slow or negative growth economic environment due to the defensive nature of drug sales and falling yields. The ..read more

Federal Reserve interest rate policy to again remain the market focus this year and create a chaotic first half. Biotechs should be favorably positioned relative to the market if the economy slips into a recession. Biotech fortunes near term are to be determined by the performance of the 10-year yield, which should  likely remain anchored or slip due to economic concerns. M&A struck a multi-year low last year and is poised to return to pre-2022 levels. After two consecutive years of negative to minimal returns, this year can be the year of biotechs with high double-digit returns ..read more

Healthcare Remains Steady As Market Approaches A Key Level Recession risks have risen as the crisis envelops more banks. The Federal Reserve's upcoming interest rate policy meeting is expected to be significant, and the market's expectations have been fluctuating. Caution is advisable when it comes to portfolio exposure, and it may be time to consider reducing exposure. The Unfolding Crisis March has been a tumultuous month with the unfolding banking crisis enveloping more financial institutions and shaking the financial markets. A rapidly rising rate environment is usually fertile g ..read more

The collapse of Silicon Valley Bank led to a market-wide selloff and caused significant volatility in biotech and technology stocks. Regulators are expected to take swift action this week to contain the crisis. Treasury yields experienced a sharp decline due to a flight to safety, which may benefit biotech stocks. In light of the developing bank crisis, the Federal Reserve may opt to raise rates by a quarter point at its March 22 meeting, instead of the expected half-point hike. A lower 10-year yield can support biotech valuations due to a high degree of correlation. SVB Rattles The M ..read more

Healthcare significantly outperformed the broader market last year, after two years of underperforming the S&P 500. When the end to restrictive policy is in sight, then the sector is likely to witness a group rotation to more growth-oriented stocks. Groups like medical devices and services, and biotechs, will perform better as the year matures, while defensive groups like pharma should perform well during the earlier part of the year. The economic situation will continue to play a large role in healthcare performance, and the choice between its defensive and growth groups. Opportunitie ..read more