In the past five years, and really for much of the bull market, the US Semiconductor Sector (DJUSSC) has closed higher than it opened in the month of May. In fact, the average return of this sector has been higher than any other month. Now, what may have happened in the past does not fully indicate what will happen in the future, but it may suggest a strong correlation.
I felt that it was time to write this article. In recent weeks we have seen the price of Bitcoin and similar cryptocurrencies rise for what seems like no specific reason. Sure, there were news of Russia investing in Bitcoin and various other news articles of similar “bullish” manner. Collectively, these may have been the fuel that has led to a $40B USD increase in the total market capitalization of cryptocurrencies YTD. Similarly, we have seen the price of Bitcoin go from the stagnant levels of $3700 of which it was hovering for months to the $5300 level at the time of writing this article.
Non-alcoholic steatohepatitis (NASH) is becoming an increasingly popular disease affecting many worldwide. This disease leads to increased liver-related mortality secondary to liver cirrhosis (fibrosis) and even hepatocellular carcinoma (liver cancer). To date, there is no known FDA approved drug therapy for this disease and generally, 15-20% of patients with NASH will require a liver transplant. Intercept Pharmaceuticals Inc. (ICPT) is expected to release news regarding their findings in the Randomized Global Phase 3 Study to Evaluate the Impact on NASH With Fibrosis of Obeticholic Acid Treatment (REGENERATE trial) this week. Below, I breakdown the potential outcomes of this trial along with the likelihood that the company will succeed or fail with regards to getting FDA approval. Next, I highlight what the FDA will be looking for to provide approval and lastly, will provide my valuation of ICPT with associated risks and potential options play.
<p>I'd like to recommend shares of Incyte Corp. (INCY) prior to the February 24 FDA PDUFA date. INCY's pipeline is very impressive. It consists of 21 compounds, 19 for which they wholly own. Of these, eight are in pivotal stages and data is expected in 2019. Of the eight, four are wholly-owned and two are partnered with NVS/LLY. The main catalysts will be Jakafi and Itacitinib for treatment of GvHD with data expected for both in 2019.</p>
<p>If you recall, I recently posted an article, found here, which among many had Immunomedics Inc. (IMMU) as a potential biotech play for the month of January. However, prior to the PDUFA date, there were concerns regarding the outstanding manufacturing issues. The confidence in the tone of the management was misleading and quite frankly frustrating. Unfortunately, the company received a Complete Response Letter (CRL) secondary to outstanding Chemistry, Manufacturing, and Control (CMC) matters. The management has stated that these issues in the CRL are both manufacturing and procedural/administrative items - they understandably could not elaborate on the details of such matters. They did mention that they believe that the issues outlines are addressable. </p>
What a year 2019 has been so far! We began the year with a bang. Biopharma M&A was has been front and center following BMY’s proposed $70 Billion USD acquisition of CELG. This seems to have triggered others to spring to action, as Eli Lilly announced to buy Loxo Oncology for about $8 Billion USD in cash thus gaining access to a portfolio of targeted medicines to treat cancers. This offer was about 68% premium of Loxo's Friday close at $235/share. Despite slowing topline growth and signiﬁcant post-tax reform ﬁrepower for numerous large-cap biopharma companies which supports M&A potential, one must point to the stock reactions for recent acquirers, notably GSK (-8% post TSRO offer), BMY (-14% post CELG offer) and LLY (-2% post LOXO offer). While this may be true, we still remain optimistic for M&As to continue in 2019, we urge you to consider drug pricing uncertainty in addition to recent volatility into your models. In light of this M&A theme following the BMY/CELG announcement, we recommend keeping an eye on following the capital allocation commentary from AMGN, BIIB and GILD. Below, we provide our guidance on our top watchlist for the month of January. Specific dates and catalysts are provided for the following stocks, SRPT, INSP, SLDB, EXEL, and IMMU.
We ended 2018 on a rollercoaster ride of emotion. The year ended with the notion that the markets have priced in lower economic growth, which has been a key driver for the recent sell-off in the markets. Subsequently, this has resulted in increased concerns of investors and expectation for a recession in 2019. About half of the US CFOs expect recession by end of 2019. Furthermoreforecastersrs see a decline in the GDP in the next year, which make the next few quarters telling of the fate of the markets. Historically, there have been more than 30 instances of US recession since the mid-1800s. Majority of the cases prior to the World Word 2 (WW2)-era have been attributed to the financial sector. However, a majority of the post-WW2 recessions have been secondary to monetary policy tightening and oil, in addition to sentiment0driven swings in borrowing and investment. Furthermore, historically, rate hikes - attributed to high inflation - and rapid tightening has subsequently ended in a recession.
You have to ask, was 2018 a dream? When it comes to the cryptocurrency space, it certainly felt that way. The space became vastly popular as it began to get traction from all sorts of investors. CNBC had a Bitcoin Watch ticker on the bottom right of the screen that kept up with the second-by-second price change. Various "experts" would provide their "insight" into the cryptocurrency space. Most famously, one suggesting that retail investors buy Ripple (XRP) essentially at its ATH price. Looking back at the chart, you can say that in 2018 the Bitcoin Bubble burst. In 2018, the overall market capitalization of the overall cryptocurrency space went from just above $800 billion USD to $130 billion USD at the time of writing this article. That is more than an 80% drop in the overall market capitalization of the cryptocurrency space. This tops the dot-com bubble where we saw the NASDAQ drop about 78% in just two years.
<p>I decided to rebrand the website for 2019. It will still consist of the same features, just renamed and rebranded. I hope that Santa has been kind to everyone. Looking at the markets you'd think that all the major indices were on Santa's naughty list. With SPY, DOW and NASDAQ essentially all in the bear market territory... and it seems that the Trump administration just can't keep their foot out of their mouth for just one day... With recent meddling of Mnuchin and his poor attempt to calm the markets resulted in the exact opposite effect, essentially leaving most institutional investors "totally baffled". His comments resulted in the DOW closing down 2.9%, SPY down 2.7% and NASDAQ down 2.2%. It wasn't long ago that we were talking about "DOW 30000!" and just months later we're back to 21k. </p>
<p>This past week I have become interested in Utilities, more specifically, Water stocks. If you're asking why or how would you invest in water then keep reading. If you're wondering why would you invest in water, then let me explain. There is an increasing demand for water for various purposes such as personal, commercial and industrial use. Water is used to generate power in the majority of global power-generating entities and it is used extensively in agriculture. Freshwater supply is increasingly declining and the world population is increasing. There is no doubt that there is an investment opportunity here. The water issues of Flint, Michigan may no longer be present in the News cycles, but I assure you they still haven't solved the city's water problem. Americans, among other countries with scares water supply need to wake up and realize that there is going to be significant scarcity in the coming decades. Sticking to the US alone, recent water quality reports have indicated that about half of US streams, akes and one-third of bays are polluted. Every year there is about 4 trillion Litters of untreated sewage, industrial waste and groundwater are introduced to US waters. The "quick shower" that we've become accustomed to every morning uses more water than a person would use in the whole day in a developing country. Get the picture? There is increasing demand, decreasing supply.</p>
It is hard to imagine that breast implants could cause cancer. It is even harder to imagine that they can cause other symptoms such as alopecia, fogginess, irritable bowel syndrome, pain, and migraines. Well, there has been a slow and steady build-up of evidence that suggests that specific type of breast implants - textured - can increase the risk of a specific rare form of cancer. Use of textured implants has been shown to be associated with a form of cancer called Breast Implant-Associated Anaplastic Large Cell Lymphoma (BIA-ALCL). Perhaps, the 47-year-old Edmonton woman who was recently featured in several news articles is a rare case, however, no one who has undergone a double mastectomy - for the eradication of risk of breast cancer - should then develop breast cancer due to the implants. However, this news was accompanied by others like her, such as the 44-year-old Terri McGregor, who ultimately required eight rounds of chemotherapy after doctors discovered that not only had her implants ruptured, but they had also provided grounds for cancer to metastasize from her capsule to lymph nodes and abdomen. Here we compare the three manufacturers of breast implants, Sientra, Allergan and Mentor.
<div dir="ltr"> <div id="Content"> <div id="Content"> <div dir="ltr"> <div id="Content"> <div id="Content"> <strong>The S&P 500 extended last week's rally by 1.1% on Monday, as investors breathed a sigh of relief that U.S.-China trade relations did not worsen over the weekend. Meanwhile, the Dow Jones Industrial Average gained 1.1%, the Nasdaq Composite gained 1.5%, and the Russell 2000 gained 1.0%.</strong> </div> </div> </div> <div dir="ltr"> <div id="Content"> <div id="Content"> President Trump and President Xi agreed at their Saturday dinner meeting to delay further tariff actions for 90 days, during which time further negotiations will be carried with an aim of trying to settle disagreements over fundamental trade issues. National Economic Council Director Larry Kudlow told reporters the 90-day clock will start with the start of the new year and expects changes across a broad range of issues to happen "very quickly." <span style="font-size: 1rem;">Stocks retreated from their best levels, though, reined in by an underlying sense that the morning's positive reaction to the Trump-Xi agreement to suspend further tariff actions was probably an overreaction since nothing concrete was achieved in terms of resolving the most important fundamental trade issues between the two countries. Also, the spirit of moving the tariff rate to 25% (from 10%) on $200 billion of Chinese goods continues to hang there </span>like<span style="font-size: 1rem;"> a stick in the event an acceptable deal to the U.S. is not struck within the 90-day deadline. What does this 90-day cease-fire really mean? Perhaps, it provides the grounds for some fruitful discussion between the two parties. </span> </div> </div> </div> </div> </div> </div>