The S&P Healthcare Index rose 6% in the first half of the year, while the Prudent Healthcare model portfolio gained 25%.While the healthcare index underperformed the broader market, there are favorable indications for the second half.Pharmaceuticals, as a major healthcare defensive group, can perform well during periods of market uncertainty, while biotechnology thrives in a ..read more

Biotech indexes lagged broader market indexes in the first half of 2024, and trade at the same level as in early 2022. Biotech valuations are closely tied to the Fed's interest rate policy and are highly correlated to the 10-year yield. Inflation is likely to trend lower, and, along with rising unemployment, should persuade the Fed to cut rates this year in September. An attractive opportunity for biotechs at the turn of an interest rate cycle that augurs well for above market returns over 2024 and beyond. Biotech Pulse During the first half of 2024, biotechnology indexes lagged as bro ..read more

Nuvalent, Inc. is a biotechnology company with precision-targeted treatments using kinase inhibitors for non-small cell lung cancer. NVL-520 targets ROS1-positive cancer and addresses treatment resistance, kinase mutations, and CNS-related adverse events, which limit existing treatments for NSCLC. NVL-655 is an ALK-selective inhibitor to overcome treatment resistance and CNS-related adverse events in ALK-driven NSCLC. Phase 1/2 updated data to be released in the second half of 2024 and Phase 2 data on its two novel candidates in 2025. Nuvalent's promising pipeline, innovative approach, and ..read more

GeneDx Holdings Corp. focuses on delivering precise medical diagnostic outcomes through its genomic expertise and rare disease dataset. Whole Exome Sequencing (WES) and Whole Genome Sequencing (WGS) are key revenue drivers, growing 96% in the first quarter. Increasing acceptance and coverage by major commercial payors and Medicaid for exome and genome testing. Strong revenue growth, improving margin profile, and reduced cash burn, with a goal to achieve profitability in 2025, will contribute to a significant stock price advance over the next 6 to 12 months. Company Overview GeneDx Hold ..read more

Evolus is a facial beauty company that specializes in aesthetic neurotoxins, with its flagship product being Jeuveau. The company is expanding its product portfolio by adding dermal fillers through exclusive agreements with Evolysse and Estyme. The market opportunity for Evolus is significant, with the neurotoxin market estimated at $3.5 billion and the dermal fillers market at $2.5 billion. Strong revenue growth, expanding product line, and imminent profitability present an attractive opportunity for a speculative small-cap stock that can potentially double. Overview Evolus (NASDAQ:E ..read more

Biotech indexes, represented by IBB and XBI, have been facing pressure since March and trading at valuations seen in April 2020. The key factor influencing biotech valuations, discussed below, is expected to become more favorable in the second half as rate-cut uncertainty diminishes. While biotechs have significantly lagged behind the broader market, there is reason to be optimistic once inflation-related volatility subsides. IBB and XBI present good vehicles for biotech exposure. Biotech Pulse Biotech stocks have faced challenges since March, with both the NYSE Biotechnology Index E ..read more

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 ..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. Biote ..read more