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)

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Preview Issue #11: J&J $30B Acquisition, Humana/Aetna Blocked and Allergan Sued

INO Health & Biotech Stock Guide

Preview Issue #11 - February 28, 2017

BIOTECH, HEALTH & PHARMA NEWS

Johnson & Johnson and McKesson make a big splash in merger and acquisition activity, courts block Humana/Aetna merger and Allergan and Endo sued by FTC. The healthcare cohort has witnessed several key events in the face of a political backdrop that’s put the entire industry on edge. The overall healthcare umbrella has become sensitive to any tweet from President Trump as he vows to bring down drug prices. As he pursues his crusade against drug pricing, much of these threats may have already been priced-in as seen in many healthcare-related stocks (i.e. McKesson, CVS, ABBV and AGN) that have seen sharp and sustained sell-offs that coincide with the 2017 presidential campaign cycle.

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Preview Issue #10: Trump Fires Shot, Valeant Divesture and Generic EpiPen Launches

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.

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Preview Issue #9: Theranos Layoffs, Amgen Wins and Potential Obamacare Repeal

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.

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Preview Issue #8: Mylan’s Generic EpiPen, Rite Aid Divesture and Allergan Acquisition

INO Health & Biotech Stock Guide

Preview Issue #8 - January 11, 2017

BIOTECH, HEALTH & PHARMA NEWS

Healthcare related stocks and more notably the biotech cohort saw a very tumultuous 2016. As the political backdrop, drug pricing debate and presidential election were thrusted into the spotlight, healthcare related stocks responded erratically to any news that would have a perceived impact on the industry. Now that 2016 it’s in the books, investors can look to 2017 and the new administration under president-elect Donald Trump. Since Donald Trump voiced his concerns over drug pricing, the initial rally in healthcare-related stocks has largely eroded to pre-election levels. Initially, the entire cohort saw significant gains as traders viewed a republican controlled government in positive light with regard to the healthcare sector. Considering the aforementioned factors throughout 2016, the iShares NASDAQ Biotechnology Index (Ticker:IBB) traded in a wide range with pronounced volatility after the presidential election posting a range of ~$240 to $344 or a 104-point gap. The upcoming 2017 year is shaping up to be an eventful one with continued uncertainty with regard to the political climate, governmental stance on mergers and acquisitions, potential deregulation, potential restructuring of the Affordable Care Act and a potentially more favorable tax and repatriation rates throughout the industry.

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