INO Health & Biotech Stock Guide
Preview Issue #10 - February 8, 2017
BIOTECH, HEALTH & PHARMA NEWS
Prior to his inauguration, president-elect Trump held a press conference and chimed in on his stance with regard to the pharmaceutical industry and more specifically drug pricing. Trump stated that drug companies are "getting away with murder" when speaking to the drug pricing issue that has taken center stage throughput the presidential campaign. These remarks immediately resulted in a broad sell-off across the entire biotech cohort. The iShares Nasdaq Biotechnology ETF (IBB) shed more than 2.5% or $7 per share as these comments were heard during the live broadcast. Although the political uncertainty has abated, Donald Trump has been able to single handily influence the movement of specific stocks (i.e. Lockheed Martin, Ford, Boeing, etc.) and sectors (i.e. automotive, biotechnology and healthcare). The overall healthcare umbrella has become volatile on the heels of any statement or tweet from Donald Trump and thus one can expect continued volatility until the crosshairs are directed elsewhere.
WHAT'S NEXT
Embattled Valeant is making a push to shore up its finances by divesting two properties, immunotherapy cancer company Dendreon and its skincare businesses CeraVe, AcneFree and AMBI for $2.1 billion in cash. This move is a commitment to the investment community that the company is serious about paying down its $30 billion debt burden. Dendreon, the maker of Provenge will be sold to China’s Sanpower Group for $819.9 million in cash. Provenge was the first personalized immunotherapy to hit the market in 2010. Provenge was approved to treat prostate cancer and at the time of Valeant’s acquisition, the company also had a completed phase II trial in bladder cancer utilizing the same immunotherapy platform. This Dendreon divestiture will be very interesting to watch especially if Sanpower Group is able to ramp up Dendroen’s previous efforts in other indications as the immunotherapy space continues to heat up.
INDUSTRY OUTLOOK
The generic EpiPen finally hits the market as a result of Mylan’s pricing fiasco for its brand name EpiPen. CVS Health announced that it will sell Impax Labs’ generic epinephrine auto-injector for $109.99. This new price point erases nearly 8 years’ worth of price increases. Combined that with a $100 coupon that commercially insured are eligible for and the net out-of-pocket expense will only be $9.99. CVS will purchase the new generic EpiPen directly from Impax Labs. Interestingly enough, CVS will continue to sell the brand name EpiPen for $649 and Mylan’s generic version for $340. Mylan was one of the few bad actors in the drug price increase scandal. Big pharma companies are joining forces as of late to address the price increases that the public and governmental officials have been demanding. Allergan, J&J, Novo Nordisk and AbbVie have committed to limiting any annual drug pricing increases to less than 10%. J&J went further stating that they will be publishing an annual report regarding its portfolio and the price increases they’ve implemented.
FEATURED STOCK / ETF - Valeant Pharmaceuticals (NYSE_VRX)
ABOUT THE EDITOR - Noah Kiedrowski
I am biotechnology professional with a diverse scientific background and detailed knowledge in many therapeutic areas such as monoclonal antibodies, immunotherapies and antivirals. I have a personal interest in finance, investing, trading and global markets. My analysis is focused on stocks and exchange traded funds (ETFs) while exploring niche opportunities such as derivative trading via options. This newsletter is intended to provide investors with the latest developments and trends regarding the overall healthcare sector with a biotechnology emphasis. I'll be highlighting sector trends, merger and acquisition activity, noteworthy current events, political developments and drug approvals. My focus will be centered on well-established mid-cap and large-cap companies as well as utilizing appropriate ETFs as proxies for sector trends. This is a bi-monthly newsletter service that reflects my own opinions and analyses. This newsletter is not intended to be a recommendation to buy or sell any stock or ETF mentioned. I am not a professional financial advisor or tax professional, rather an individual investor who analyzes investment strategies and disseminates my analyses. I encourage all investors to conduct their own research and due diligence prior to investing.
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This bi-monthly newsletter service reflects the opinions and analyses of INO Contributor, Noah Kiedrowski. This newsletter is not intended to be a recommendation to buy or sell any stock or ETF mentioned. Kiedrowski is not a professional financial advisor or tax professional, rather an individual investor who analyzes investment strategies and disseminates his own analyses. All traders and investors should conduct their own research and due diligence prior to investing.
