IBB - Biotech Catches Fire... Finally

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Biotechnology has been a difficult space to deploy capital over the previous ~18-24 months. This cohort plummeted over and over again from both sides of the political isle as the 2016 presidential race unfolded. Between Hillary Clinton, Bernie Sanders and Donald Trump taking aim at drug pricing via speeches, Twitter, and other social media platforms, largely attributed to the entire cohort selling off. The sustained sell-off lead to the entire cohort to sell off from all-time highs of $400 to $240 or 40% in only six months as measured via the iShares Biotechnology Index ETF (NASDAQ:IBB). From February of 2016 through June of 2017 IBB traded in a tight range from $250 to $300 while Donald Trump continually fired shots against the healthcare sector. Any healthcare related stocks became volatile on the heels of any statement or tweet from Donald Trump. Shortly after the inauguration, Trump stated that drug companies are “getting away with murder” when speaking to the drug pricing issue. Now he’s come out and stated that he’s working on a “new system where there will be competition in the drug industry.” Every time any of these remarks were tweeted, they immediately resulted in a downtrend across the entire biotech cohort. As the new proposed health care legislation enters its initial stages in Congress, a level of certainty has entered the picture, and the drug pricing threats are not perceived to be as bad as initially feared. Recently the index has had a resurgence moving from $284 to $321 or 13% over the past month. As the political headwinds continue to abate, I feel the index has room to continue its upward trend. Continue reading "IBB - Biotech Catches Fire... Finally"

Issue #15: Healthcare Earnings, Cardinal Health/Becton Dickinson Acquisitions and Clinical Trial Updates

INO Health & Biotech Stock Guide

Issue #15

BIOTECH, HEALTH & PHARMA NEWS

Healthcare sector earnings are underway and thus far overall earnings have been robust overall with pockets of softness. From the health insurer side, UnitedHealth (UNH) beat on both EPS and revenue with revenue coming in at a 9.4% year-over-year growth. From the pharmaceutical supply chain, Cardinal Health (CAH) beat on EPS, missed on revenue and disappointed investors when they offered a softer outlook for fiscal 2017 and 2018. This set off a sell-off in the pharmaceutical supply chain stocks. In the biotech space, AbbVie (ABBV) beat on both EPS and revenue with revenue coming in at 9.7% year-over-year growth, Celgene (CELG) beat on EPS and missed on revenue, however revenue came in at a 17.9% increase year-over-year, Regeneron (REGN) missed on EPS, but beat on revenue with a 10% year-over-year growth, Amgen (AMGN) beat on EPS however missed on revenue with a year-over-year decline of 1.3%. In the pharmacy and PBM side, CVS Health (CVS) beat on both EPS and revenue with a 3.0% year-over-year increase and Walgreens (WBA) met EPS and missed on revenue with a year-over-year decline of 2.4%. As Q1 comes to a close, it appears the healthcare cohort has some softness in the pharmacy and pharmaceutical supply chain spaces however biotech and health insurers have posted robust revenue growth.

Continue reading "Issue #15: Healthcare Earnings, Cardinal Health/Becton Dickinson Acquisitions and Clinical Trial Updates"

Issue #14: Walgreen and Rite Aid Deal, Eli Lily and Incyte Fail and NASH Market Heating Up

INO Health & Biotech Stock Guide

Issue #14

BIOTECH, HEALTH & PHARMA NEWS

The proposed Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and Rite Aid Corporation (NYSE:RAD) deal continues to be drawn out and increasingly tumultuous between the companies involved and federal regulators. Recently,  Rite Aid and Fred's Inc. (NASDAQ:FRED) shares dropped amid talk the Federal Trade Commission is leaning towards filing a lawsuit seeking to block Walgreens' planned acquisition of Rite Aid. In December of 2016, the companies announced an agreement to sell 865 stores to Fred’s for $950 million in cash. Earlier this year, Walgreens and Rite Aid agreed to divest more stores, boosting the number to 1,200 and to reduce their merger price.

Continue reading "Issue #14: Walgreen and Rite Aid Deal, Eli Lily and Incyte Fail and NASH Market Heating Up"

Issue #13: Icahn's Bristol-Myers Stake, Biotech Cohort Rallies and Eli Lilly's CEO Speaks

INO Health & Biotech Stock Guide

Issue #13

BIOTECH, HEALTH & PHARMA NEWS

Ever since President Trump met with a group of pharmaceutical executives at the White House, the entire biotech cohort has witnessed a resurgence as of late. This meeting was perceived as a positive interaction between the nascent government and the industry on a whole. This coincides with a consortium of big pharma companies joining forces to address transparency on drug price increases. Allergan (AGN), J&J (JNJ), Novo Nordisk (NVO), Merck (MRK) and AbbVie (ABBV) have committed to limiting any annual drug pricing increases to less than 10%. J&J, AbbVie and Merck all published annual reports regarding its portfolio and the price increases they’ve implemented. This transparency coalition is a step in the right direction to appease the general public and governmental officials that have been very critical of drug price increases. To add icing on the cake, Amgen’s CEO stated “We look forward to working collaboratively with the new administration.” Pharmaceutical executives are being proactive to be part of the conversation and be present at the table when it comes to working with Trump and his hardline stance regarding jobs and drug prices. The collaborative approach will hopefully bode well for the industry as a healthy relationship is fostered perceived on Wall Street.

Continue reading "Issue #13: Icahn's Bristol-Myers Stake, Biotech Cohort Rallies and Eli Lilly's CEO Speaks"

Issue #12: Trump’s Love-Hate Relationship With Pharma, Amgen Promises Jobs and Sector Earnings Underway

INO Health & Biotech Stock Guide

Preview Issue #12 - March 20, 2017

BIOTECH, HEALTH & PHARMA NEWS

President Trump met with a group of pharmaceutical executives at the White House where he voiced his concerns over their pricing, stating that pricing “has been astronomical.” In the same meeting, President Trump said “You folks have done a very great job over the years,” and “but we have to get the prices down.” In a separate press conference, Trump said that big pharma was “getting away with murder”. Big pharma companies are joining forces as of late to address the price increases that the public and governmental officials have been demanding. Allergan (AGN), J&J (JNJ), Novo Nordisk (NVO) and AbbVie (ABBV) 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. AbbVie released data on its increases as well stating that Humira was increased by 8.4% with an only once annual increase moving forward. Merck (MRK) becomes the latest pharma to join this drug pricing transparency coalition. Merck raised list prices by an average of 9.6% with an average net price increase of 5.5%. This transparency is a step in the right direction to appease the general public and governmental officials.

President Donald Trump

Figure 1 - President Trump met with pharmaceutical industry leaders at the White House on Tuesday. From left are PhRMA President Stephen Ubl, Merck CEO Kenneth Frazier, Trump, Celgene CEO Robert Hugin and Amgen CEO Robert Bradway. (Evan Vucci / Associated Press)

WHAT'S NEXT

Continue reading "Issue #12: Trump’s Love-Hate Relationship With Pharma, Amgen Promises Jobs and Sector Earnings Underway"