IBB Looks Ripe For A Turnaround In 2017

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Will the confluence of abating political uncertainty, proposed self-regulation on drug price increases, potential merger and acquisition activity and chronically depressed valuations bode well for IBB in 2017? The biotech cohort saw a very tumultuous 2016 to say the least as the political backdrop, drug pricing debate and presidential election took the headlines. Biotech stocks responded erratically to any news that would have a perceived impact on the cohort during this timeframe. Since Donald Trump voiced his concerns over drug pricing, the initial rally in biotech has largely eroded to pre-election levels. The iShares Biotechnology Index ETF (NASDAQ:IBB) traded in a wide range throughout 2016 with pronounced volatility throughout the presidential election cycle registering a range of ~$240 to $344 or a 104-point range (Figure 1). The upcoming 2017 year is shaping up to be an eventful one with continued uncertainty about the political climate, governmental stance on mergers and acquisitions and potential deregulation. Another hot button issue will be the potential restructuring of the Affordable Care Act and proposed favorable tax and repatriation rates. Continue reading "IBB Looks Ripe For A Turnaround In 2017"

Biotech's Upward Trend - IBB Breaks $300

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction and Backdrop

As of recent, the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) has caught an upward trend and briefly crossed the $300 per share threshold for the first time over the past 9 months. The political backdrop has been very contentious and even more so after two of the three presidential debates have wrapped up. I’ve written several pieces evaluating the massive sell-offs in the biotech sector and how extraneous events such as oil, China, interest rates and to a large extent political threats are merely noise in the larger picture. These external events provide great buying opportunities in high-quality companies or the cohort itself as represented by the sector ETF, IBB as a proxy. There’s no doubt that there’s at least a loose correlation if not a direct correlation between opportunistic political posturing by political front-runners (i.e. Hilary Clinton and Bernie Sanders) and the chronic price suppression of IBB. Each time a tweet is pushed out to social media regarding drug pricing and/or specific attacks on pharmaceutical companies, the entire cohort takes a significant hit as reflected in the price action of IBB. I contend that political posturing played a major role in the sell-off of the healthcare cohort and more specifically biotech stocks. Drug pricing was used as a centerpiece and scapegoat for political gains. Continue reading "Biotech's Upward Trend - IBB Breaks $300"

The Presidential Nominees Are Set

Noah Kiedrowski - INO.com Contributor - Biotech


The political lines have been drawn, it’s Clinton verses Trump. I written several pieces evaluating the massive sell-offs in the biotech sector. Utilizing the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) as a proxy, I proposed a loose correlation between opportunistic political posturing by political front-runners and the chronic price suppression of IBB. I content that political posturing played a significant role in the sell-off of the healthcare cohort and more specifically biotech stocks. Drug pricing was used as a centerpiece as the scapegoat for political gains. Throughout this political process, this rhetoric has negatively impacted the sector. IBB fell from $401 in July of 2015 to $240 in February of 2016 or alternatively a 40% hit. This sell-off coincided with political rhetoric aimed at the collective cohort of healthcare and biotech companies. I strongly felt that these events were seasonal and would eventually subside without any significant impact to the underlying stocks within IBB. I felt this political induced sell-off presented a great buying opportunity after the 40% decline. I put my money where my mouth was by purchasing two tranches of IBB at a strike price of $250 in February and June during the market-wide sell-off and the Brexit, respectively. I feel that this is great entry point for any long-term investor that desires exposure to the biotechnology sector.

Are Drug Prices Really The Culprit?

In terms of the overall cost to the healthcare system, drugs comprise less than 10% of the pie. Allergan CEO Brent Saunders stated in an interview with Jim Cramer on Mad Money (Figure 1): Continue reading "The Presidential Nominees Are Set"

IBB: Brexit Collateral Damage Provides Brief Buying Opportunity

Noah Kiedrowski - INO.com Contributor - Biotech


As Brexit wreaked havoc on international financial markets, it presented a brief opportunity to capitalize on the collateral damage fallout within the biotechnology cohort. This event may continue to offer entry points as the reverberations are felt throughout the markets. I didn’t factor in the possibility that a major economic power within the EU would vote to relinquish its membership and move forward as an independent nation. However as Brexit became reality, I utilized this opportunity to deploy capital in the biotechnology cohort via the iShares Biotechnology Index ETF (NASDAQ:IBB) as a long-term investor within the space. As the UK proceeded with its divorce from the EU, markets sold off in a meaningful way. Brexit introduced instability throughout the region thus negatively impacting financial markets abroad. I largely view the Brexit as an extraneous event unrelated directly to the biotechnology cohort; thus I utilized this brief opportunity to add to my position in IBB and may continue to add in periods of weakness. Continue reading "IBB: Brexit Collateral Damage Provides Brief Buying Opportunity"

TIME Magazine Showcases Immunotherapy – Immunotherapy ETF Now Trading

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Immunotherapy has garnered national attention recently by being showcased on the front cover of Time magazine. Immunotherapy has been an emerging and exciting therapeutic area that has experienced massive growth in terms of research and development expenditures and the sheer number of clinical trials. Immunotherapy ushers in a new class of potentially promising therapies by harnessing the body’s immune system to recognize and eradicate debilitating diseases, specifically cancer and chronic viral infections. This immunotherapy approach may inevitably result in a paradigm shift from traditional medical intervention. Immunotherapy possesses holistic attributes by harnessing the body’s immune system to contend with or in some cases prevent disease. In addition to the holistic aspects, immunotherapy has been shown to have a favorable side effect profile and best-in-class efficacy across many different disease states. These therapies may provide powerful technology to contend with a host of diseases, and in a future state, may potentially serve as a preventative technology similar to a traditional vaccine. Immunotherapy has evolved into many different classifications with differing modalities over the past few years, which has given rise to a growing number small-cap biotechnology companies with potential investment opportunities via an immunotherapy ETF. In late 2015, Loncar Cancer Immunotherapy ETF launched (NASDAQ:CNCR) and provides investors with an opportunity to invest in this unique cohort. Continue reading "TIME Magazine Showcases Immunotherapy – Immunotherapy ETF Now Trading"