Despite a Trump tweet denouncing price hikes in drug products, the biotech sector continued its bounce higher. The Nasdaq Biotech ETF (NASDAQ: IBB) touched a yearly high last week and could hold those gains. Valuations and a lack of investor worries may propel the sector higher.
After announcing price hikes on around 20 products, Pfizer (NYSE: PFE) reversed the move for up to six months after drew the ire of the U.S. President. The setback signals limited price increases and profit margin growth for drug stocks.
Pfizer itself will restructure its business in an effort to streamline its organization. It is splitting into three units: Innovative Medicines, Established Medicines, and Consumer Healthcare.
Other beaten down stocks did better on the week: Celgene (NASDAQ: CELG) reported positive results for its blood disorder drug study. The stock broke out above the $80 trading range last week. Atopic dermatitis drug giant Regeneron Pharmaceuticals (NASDAQ: REGN) closed above its 200-day simple moving average at the start of the month.
More positive clinical results data for its Dupixent product and a rebound in sales of EYLEA this year would support the multi-year, bullish story in REGN stock.
Investors continued accumulating Hepatitis C vaccine supplier Gilead Sciences (NASDAQ: GILD). A word of warning: its earnings, scheduled for July 25, may disappoint investors yet again. Falling revenue from HIV and HBV is due to the introduction of Tenofovir Alafenamide. Expect a slow pickup in sales initially, limiting the upside story in Gilead stock in the near-term.
