INO Health & Biotech Stock Guide
Preview Issue #9 - January 25, 2017
BIOTECH, HEALTH & PHARMA NEWS
2017 is kicking off to be an eventful year in the healthcare space. Regeneron was handed a devastating blow in federal court in a lawsuit filed by Amgen surrounding its cholesterol-lowering drug Praluent. Amgen claimed that Regeneron’s Praluent infringed on Amgen’s patents and competing drug Repatha in a long-standing patent lawsuit. Amgen previously won a trial in which Regeneron was shown to have infringed on two patents covering a class of cholesterol-lowering drugs. The most recent ruling stipulates that Regeneron must stop selling Praluent in the U.S. altogether due to “irreparable harm” to Amgen. It’s extremely rare to see a ruling in which a drug is ordered to be removed from the market as opposed to a financial penalty or royalties. Monetary implications at the moment are minor as Praluent and Repatha have had minimal sales through the first 9 months of 2016 of $75 million and $83 million, respectively. Despite these numbers, if positive data comes to fruition that extends a clinical benefit to more patients in lowering rates of heart attacks, strokes and death then Amgen’s drug could gain broader insurance coverage and ultimately sell $2-$4 billion on an annual basis worldwide. Amgen shares popped 5% on the news while Regeneron shares sank 6% albeit shares were halted once the ruling came down.
WHAT'S NEXT
Theranos is back in the news after a series of debacles throughout 2016. In October of 2016, the company laid off 340 workers and its clinical labs and Wellness Centers. Shortly thereafter, Walgreens ended its partnership with Theranos and filed a lawsuit against the company for $40 million for breach of contract. It was recently announced that Theranos is now laying off 155 people or roughly 40% of its remaining workforce. This comes on the heels of regulatory issues, lawsuits, public relations issues and scrutiny from partners and experts alike. After this latest layoff, Theranos is left with 220 employees to focus on its business and path forward. Theranos is currently a private company however after the latest slew of issues it’s unlikely the company would consider an IPO anytime soon until these issues are resolved.
INDUSTRY OUTLOOK
Since Donald Trump’s presidential victory in November, discussions regarding restructuring of the Affordable Care Act (ACA) or abolishment altogether have been tossed around and appear to be gaining traction. Despite the heavy rhetoric, a comprehensive alternative to the ACA has not been proposed. Opponents to any changes to the status quo are attempting to get out in front of this debate with laying out negative consequences of such a change. Critics are estimating that any savings will be negated by job losses, decrease in gross state product and loss of medical coverage. Director of the Center for Health Policy Research, Leighton Ku stated that “repealing key parts of the ACA could trigger massive job losses and a slump in consumer and business spending that would affect all sectors of state economies”. Initial estimates on the potential repeal of the ACA are losses of up to 3 million jobs and a $1.5 trillion reduction in gross state product from 2019 through 2023. This will be a very contentious battle between proponents and the incoming administration moving into 2017.
FEATURED STOCK / ETF - Amgen (NASDAQ_AMGN)
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.
