Biotechs Underperform and Lag Market Indices on a Good Day-NASDAQ up 0.89%

Trading Range Requires Good Stock Picking Skills, XBI is down 0.85% to $89.04.

Stealth Buyout with Lilly Acquisition of ARMO BioSciences

Biotechs underperformed despite a good opening with the XBI trying to break through the SMA 50 level but fell back around mid-day. Some good news helped at the opening but momentum eased later in the day maybe because of anticipated drug pricing rhetoric in the news or lack of clinical breakthrough news. A Trump “populist” speech on drug pricing is expected tomorrow.

Lilly (LLY) stepped up to acquire ARMO Biosciences (ARMO) for $1.6B, or $50/share to bolster its clinical pipeline in immune-oncology. ARMO's lead asset is pegilodecakin, a PEGylated IL-10 is being studied in multiple tumor types with a Phase 3 trial for pancreatic cancer. The ARMO stock soared 67% today to $49.81 near its 2018 and 4 month high in the $55 range. ARMO went public this year on 1/30/18 at an IPO price of $17!

Large caps were mixed, IBB was flat, but Abbvie (ABBV) looks strong up 1.65% near the $103 level. Celgene (CELG) is stuck near the 12 month bottom down 0.5% and is becoming. drag on the overall sector. More upside action was printed in the Mid-Caps among usual suspects: AGIO, ARRY, ARNA, BLUE, CLVS, LGND, NBIX,  But a few well known stocks were hit hard: Exelixis (EXEL) was down 13% on a Phase 3 trial results of a Cotellic an MEK inhibitor with Tecentriq an anti-PDL1 antibody that failed to improve survival in metastatic colorectal cancer compared to Bayer's Stivarga; PUMA Biotechnology (PBYI) sunk 18% on concerns about Nerlynx (neratinib) its first commercial product for early stage HER-2 positive breast cancer. Q1 revenues were $36M .