Cramer's Biotech Trend Plays
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Date updated:07-24-2008

"I don't even know where to begin about the positives of the Genetech (DNA)- Roche deal. First, it confirms the general trend: the dollar is so weak that it is worth buying anything that's name-brand if you are from Europe, including Anheuser-Busch (BUD ), a total creature of the weak dollar. It confirms a second trend that the biotechs are the best buys when it comes to a bank-led slowdown. Finally, there is the sentiment issue. Every time the press has hit something during this abominable era, it has struck pay dirt. The negativity surrounding DNA was so great that even when it reported better-than-expected earnings, the stock took a hit initially until people realized that Avastin really was growing again." - Jim Cramer

symbol name last price % change open
  • +
  • DNA
    Genentech Inc
  • $82.55
  • -3.65%
  • $85.98

Thank you, New York Times. Remember just a couple of weeks ago, when The New York Times wrote about how Genentech's (DNA) Avastin was too expensive and the stock got cracked down to $77? I know Roche did. I bet that was the last draw. The dramatic decline in the dollar plus a sentiment that has spawned a thousand articles -- that life-saving drugs cost too much -- gave the Swiss giant a chance to bolster its own anemic pipeline by buying what may be the greatest wonder drug of all time in its $43 billion bid, no doubt the beginning price for what will ultimately be a deal close to $100 a share. (I pushed DNA hard here and on "Mad Money" because I have been a huge believer in Avastin and I'm confident that people will pay anything -- or family members will pay anything -- for the hope of three or four months or more of life, or the chance of beating cancer altogether.)

People owning DNA also tend to own: ABTAMGNBDXBMYCAHFRXGENZ

TheStreet.com Rating: A- What is this?

  • +
  • AMGN
    Amgen
  • $49.70
  • -5.03%
  • $51.30

Just like in 1990, the biotechs -- then led by Amgen (AMGN) -- produced spectacular results as their earnings shined in the face a collapse in the financials.

People owning AMGN also tend to own: AAPLGESGPCECEMRVLOMRIANF

TheStreet.com Rating: B- What is this?

  • +
  • GILD
    Gilead Sciences
  • $46.47
  • +0.98%
  • $45.34

I bought Gilead (GILD) on Friday for Action Alerts PLUS with the trashing it endured because it spent too much -- consider it the Research In Motion (RIMM) of the group.

People owning GILD also tend to own: ACLALXNBMRNCELGCVHCVSESRX

TheStreet.com Rating: B What is this?

  • +
  • DVA
    Davita Inc
  • $49.09
  • -4.77%
  • $50.68

Amgen, coincidentally, has been rallying on a better reimbursement environment from the new Medicare bill, an adjunct to DaVita's (DVA) boost.

People owning DVA also tend to own: AFAMBCOBYDCCRTEGYHALHANS

TheStreet.com Rating: B+ What is this?

  • +
  • BIIB
    Biogen Idec Inc
  • $40.72
  • -7.43%
  • $42.56

Don't forget that the whole group is running, including Biogen (BIIB), as the B section of the Journal shows, and Cephalon (CEPH), which seems like nothing but net lately.

People owning BIIB also tend to own: APOLBRK-BDELLELOSLXKSAFMSGTL

TheStreet.com Rating: B- What is this?

  • +
  • CEPH
    Cephalon Inc
  • $69.61
  • -2.08%
  • $70.60

Don't forget that the whole group is running, including Biogen (BIIB), as the B section of the Journal shows, and Cephalon (CEPH), which seems like nothing but net lately.

People owning CEPH also tend to own: ALBCBRLCMGCROXCWTRDAKTDECK

TheStreet.com Rating: B- What is this?

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