Health Care (XLV) held support along its 21-DMA and rallied back towards all-time highs last week. The sector
gained 2.8% outperforming the broader market but remains flat versus the S&P 500 over the trailing two
weeks.
Author: Raj Gupta
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trending into new all-time
highs after clearing out from consolidation this week. Near-term support for both indices remains this rising 10-
DMA (S&P 500: 3,642; Nasdaq: 12,215). The distribution day count declined, falling to four and three, respec-
tively, with no further expiration next week.
O’Neil Health Care Weekly
Health Care (XLV) broke into new highs last month and has since pulled back to its 21-DMA in relatively low
volume. Though intact on an absolute basis, the sector is significantly underperforming the S&P 500 since
breaking into new highs.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trading at all-time highs. Sup-
port remains the rising 10- and 21-DMA (S&P 500: 3,546; Nasdaq: 11,790). Each index has six distribution
days, however three expire on each next week, including one on Monday.
O’Neil Health Care Weekly
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq traded relatively flat on the week,
consolidating within 2% of all-time intraday highs. Both indices tagged and held 10-DMA support this week.
Support below that level remains the rising 21-DMA (S&P 500: 3,512; Nasdaq: 11,665). The distribution day
count stands at seven and six, respectively, with one day expiring on the S&P 500 next week.
Samsung Biologics
Key points from this report:
- Buy Samsung Biologics (BCS.KR; 207940 KS). The stock is actionable as it builds the right side of a new base in heavy volume with an exact pivot of KRW 863K.
- Strategic partnership for COVID-19 antibody treatment: Samsung has begun mass production of Eli Lilly’s (LLY) COVID-19 antibody drug after receiving emergency use approval from the U.S. FDA. Lilly is planning to manufacture one million doses by the end of 2020.
- Capacity expansion. On November 18, Samsung officially began the construction of the world’s largest biopharmaceutical manufacturing facility with a capacity of 256K liters. This new plant will expand total capacity by 71% to 620K liters.
- Global expansion. Samsung Biologics has opened its first CDO R&D center in the U.S., with an aim to expand to Europe and China in coming years.
- Biosimilar update. The company now has five marketed biosimilars in its portfolio with two in phase 3 trials. The European Medicines Agency has accepted the filing of its Lucentis Biosimilar.
- See other ideas in our O’Neil Health Care Weekly
Pacira BioSciences
Key points from this report:
- Buy Pacira Biosciences (PCRX). The stock is actionable after breaking out of a 13-week consolidation base on above average volume. Buy at current levels or on any constructive pullback to the rising 10-DMA.
- Strong post COVID-19 recovery. Exparel net product sales for October came in at $40.7M (+112% y/y). The drug has outpaced the elective surgery market throughout the pandemic. According to weekly data from mid-October, elective surgery procedures in the U.S. were down 26% while Exparel sales were up 13%. Management believes 90%+ of delayed procedures will be performed this year, with 2021 a substantial improvement over 2020.
- No competition until mid-2021. The U.S. FDA has classified Heron Therapeutics’ (HRTX) application for HTX-011 as class-2 submission, which indicates the agency could take up to six months to review the new information.
- Looking forward. The company will announce Q4 results in February. For 2020, consensus expects revenue and EPS growth of 2% and 26%, y/y, respectively. Consensus expects 2021 revenue and EPS growth of 26% and 74%, y/y, respectively
- See other ideas in our O’Neil Health Care Weekly
O’Neil Health Care Weekly
Over the last five sessions, Hospitals, Long-term Care, Managed Care, and Wholesale Drug/Supply led, while
Diversified Pharmaceutical and Research Eqp/Svc lagged.
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trading near all-time highs,
holding above 21-DMA support (S&P 500: 3,466; Nasdaq: 11,532) after reversing off intraday highs on Mon-
day. The distribution day count stands at seven and six, respectively, with one expiring on the S&P 500 Monday
and another on Tuesday.