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Four Small-Cap Pharmaceutical Stocks to Buy Despite Big Bank Failures

Four small-cap pharmaceutical stocks to buy despite big bank failures have found market niches to develop products that people really need and want. The…



Four small-cap pharmaceutical stocks to buy despite big bank failures have found market niches to develop products that people really need and want.

The four small-cap pharmaceutical stocks to buy focus on companies that have a market capitalization between $250 million and $2 billion. They often can grow at faster rates than bigger pharmaceutical stocks but often have less long-term financing than mid-caps stocks of $2-$10 billion, large-cap stocks between $10-$200 billion and  mega-cap stocks above $200 billion.

Financing is important due to the two major bank failures of the past week. The leaders of both banks and businesses needed to recognize that the economic environment changed when the Fed became serious about reducing inflation in 2022 with rate hikes.

Apparently some, such as Santa Clara, California-based Silicon Valley Bank (NASDAQ: SIVB) and New York’s Signature Bank (NASDAQ: SBNY), did not recognize the new circumstances. Not even an auditing firm like KPMG LLP fully recognized the risk, since Silicon Valley Bank failed just 14 days after receiving a clean report and cryptocurrency-focused Signature Bank collapsed 11 days following it receiving its report with no red flags about financial fallout, according to the Wall Street Journal.

“When the Fed is openly supporting stock markets and economic growth, it’s easy to make money by taking a lot of risk,” said Bob Carlson, a pension fund chairman and also leads the Retirement Watch investment newsletter. “But when the Fed changes course, risk management is important to success and survival. SVB had weak risk management. Investors need to look beyond a firm’s financial numbers and try to determine if it has adequate risk management policies.”

Retirement Watch head Bob Carlson discusses investing with Paul Dykewicz.

As a pension fund chairman, Carlson is seasoned about managing investment risks. He has served on the Board of Trustees of the Fairfax County Employees’ Retirement System since 1992 and been elected to serve as chairman every year since 1995.

Four-Cap Pharmaceutical Stocks to Buy as Alterative to Giants

Another seasoned guide to investing in pharmaceutical stocks is Mark Skousen, PhD, who recommended a profitable one in his Forecasts & Strategies investment newsletter when the overall market struggled during the pandemic. Dividend-paying and New York-based Pfizer Inc. (NYSE: PFE rose 54.76% from December 2015 to July 2021, while Skousen recommended it.

One of the challenges in investing in pharmaceutical stocks is entering and exiting at the right times, since new product development is not assured of success. Skousen chose a proven large-cap stock and held it through the first part of the COVID-19 pandemic.

Pfizer proved to be an astute investment when it teamed up with a smaller industry partner, BioNTech SE (NASDAQ: BNTX), a Mainz, Germany-based biotechnology company that has grown beyond the mid-cap stage and now is at the low end of the large-cap range with a market cap of $31.31 billion. Even though Pfizer did not acquire BioNTech, the two companies collaborated to provide one of the first and most effective COVID-19 vaccines in the world.

BioNTech was a mid-cap stock as recently as 2019, when it had a market cap of $7.68 billion before the pandemic. The share prices of BioNTech and Pfizer both rose during the pandemic but Skousen, who also leads the Five Star Trader advisory service that features stocks and options, identified weakness developing in the stocks and the market when he informed his subscribers to take profits. As an economics professor, Skousen also tracks inflation and recession risk closely.

Mark Skousen, a scion of Ben Franklin and head of Five Star Trader, meets Paul Dykewicz.

Four-Cap Pharmaceutical Stocks to Buy Include Atea Pharmaceuticals

Atea Pharmaceuticals Inc. (NASDAQ: AVIR), a clinical-stage biopharmaceutical company based in Boston, has been focusing on the discovery and development of oral direct acting therapeutics such as bemnifosbuvir for COVID-19 and other viral diseases. The “commercial opportunity” for Atea is enhanced by data from a study that suggests the drug’s role as a monotherapy in COVID-19 could serve “significant unmet need” in the patients who are at highest risk of disease progression, but the least likely to be prescribed an oral antiviral, according to Chicago-based William Blair & Co.

“Despite growing apathy to COVID-19 in the general public, the COVID-19 oral antiviral market opportunity remains massive and is expected to remain a long-term multibillion-dollar opportunity, especially when considering waning immunity, new variants and decreased usage of vaccines,” William Blair biotechnology analyst Tim Lugo wrote.

A significant market exists in “government stockpiling” that could be worth billions of dollars due to the size of the opportunity and the precedent of Tamiflu stockpiling, Lugo predicted. While investor focus is likely to remain on COVID-19 development, the product pipeline of Atea Pharmaceuticals is showing encouraging progress, he added.

William Blair maintains an “outperform” rating on the stock, citing a differentiated platform and portfolio of product candidates for the treatment of viral diseases. The investment firm also foresees value in the shares that currently are trading at a negative enterprise value.

Atea Pharmaceuticals reported a fourth-quarter 2022 net loss of $34.3 million, or $0.41 per share, wider than William Blair’s estimate of $31.3 million, or $0.38 per share, but narrower than consensus analysts’ estimates of $37.6 million, or $0.44 per share. The company ended the latest-fourth quarter with $646.7 million in cash and equivalents, compared to $665.0 million at the end of the prior quarter.

With reduced prioritization of the company’s AT-752 dengue program, its management now anticipates a cash runway into 2026.

Chart courtesy of

Four-Cap Pharmaceutical Stocks to Buy Encompass Century Therapeutics

Founded in 2018, Philadelphia-based Century Therapeutics Inc. (NASDAQ: IPSC) is a clinical-stage biotechnology company developing induced pluripotent stem cell (iPSC)-derived cell therapies in immuno-oncology. The company is a so-called early-stage pipeline Smid (small- and mid-cap stocks), is rated a “buy” and has received a $28 price objective from BofA Global Research.

The BofA placed a probability-adjusted net present value (NPV) on the product pipeline of Century Therapeutics. BofA has forecast revenue for the company through 2038, assuming a -5% to -10% terminal growth rate and a 14-15% weighted average cost of capital (WACC) for each pipeline program based on its stage of development.

Treatment of bladder and kidney cancers are included in BofA’s estimated platform/ pipeline value for the stock of $8/share. Based on comparison to the value of other early-stage technology platforms, including cell therapies and broadly applicable oncology platforms, BofA estimates a $500 million platform value of $8 per share. BofA also values the company’s cash position at $6 per share.

Potential downside risks for Century Therapeutics are a failure of its clinical trials, less commercial uptake than anticipated and better-than-expected progress of competitive programs.

Chart courtesy of

Caribou Biosciences Belongs Among Four-Cap Pharmaceutical Stocks to Buy

Caribou Biosciences Inc. (NASDAQ:CRBU), a clinical-stage CRISPR genome-editing biopharmaceutical company headquartered in Berkeley, California, describes itself as a developer of transformative therapies for patients who have devastating diseases. The company is advancing a pipeline of off-the-shelf cell therapies from its CAR-T and CAR-NK platforms as treatments for patients with hematologic malignancies and solid tumors.

The genome-editing platform of Caribou Biosciences includes its proprietary Cas12a chRDNA technology, enabling superior precision to develop cell therapies that are intended to potentially improve antitumor activity. CRISPR genome editing uses modular biological tools to make DNA changes in living cells. There are two basic components of Class 2 CRISPR systems: the nuclease protein that cuts DNA and the RNA molecule that guide the nuclease to generate a site-specific, double-stranded break, leading to an edit at the targeted genomic site.

CRISPR systems can edit unintended genomic sites in a process known as off-target editing that may lead to harmful effects on cellular function and phenotype. In response to this challenge, Caribou has developed CRISPR hybrid RNA-DNA guides (chRDNAs) that direct substantially more precise genome editing compared to all-RNA guides.

Caribou Biosciences received a $27 per share price objective from BofA Global Research, based on a probability adjusted net present value (NPV) of treatments in its pipeline, its partnership and its cash position.

Downside risks that could cause Caribou Biosciences to fall short of that price objective include initial clinical data for pipeline programs failing to show a meaningful benefit in patients; pipeline therapies fail to differentiate from similar competing products; and a regulatory and reimbursement environment that weighs on commercial economics. In addition, patent litigation could invalidate or otherwise undermine the intellectual property (IP) portfolio and funding may be insufficient to move forward pipeline aspirations or manufacturing buildout.

Chart courtesy of

Five Mid-Cap Pharmaceutical Investments to Purchase Include Rising Small Cap

Tustin, California-based Avid Bioservices (NASDAQ: CDMO), with a market cap of $1.01 billion, is a contract development and manufacturing organization, or a CDMO. It explains why the company’s leaders picked CDMO as the stock’s ticker symbol, said Michelle Connell, head of Dallas-based Portia Capital Management.

Avid provides manufacturing facilities to other biotech companies, since the industry is constrained and is short on capacity. To address the problem, Avid is in the process of more than doubling its capacity, Connell continued.

Michelle Connell leads Dallas-based Portia Capital Management.

A reason Connell said she prefers CDMO to other biotech companies is that it is not developing pharmaceuticals and thereby is not dependent on Food and Drug Administration (FDA) approval, Connell counseled. Biotech companies that are dependent upon FDA approval are binary, either winning or losing, she added.

“Thus, there can be huge risk owning one or two pure biotech plays,” Connell said.

Connell pointed out that, unlike many biotech plays, Avid is profitable in terms of net income and cash flow. Even though the stock is not big enough yet to rank at the low end of the mid-cap category, Connell said she likes it well enough to rate the rising small cap as her top choice in both groups.

“Its operating cash flow has been positive for the past three years,” Connell said.

Like most biotechnology stocks, Avid had negative performance in 2022 but the stock has jumped 36.46% so far this year through March 14.

Since the company still is cheap on a price-to-earnings as well as price-to-sales basis, Connell projected the stock is posed for further double-digit-percentage upside in the next 12 months.

Chart courtesy of

Avid Biosciences Reported Favorable Financial Results

The company is reiterating full 2023 fiscal year revenue guidance of between $145 million and $150 million. It reported revenues for its third quarter of fiscal 2023, at $38.0 million, representing a 21% increase compared to $31.5 million recorded in the same period the previous year.

For the first nine months of fiscal 2023, ended January 31, 2023, revenues were $109.5 million, a 24% increase compared to $88.4 million in the prior year period. For both the quarter and the year-to-date periods, the rise in revenues primarily can be attributed to jumps in manufacturing runs, process development services for new customers and revenue recognized in the current year period for changes under a contract where uncertainties were resolved.

Revenue and increased capacity utilization are having a positive impact on margins, the company reported. During the third quarter of fiscal 2023, Avid Biosciences signed $67 million in new business to mark its strongest quarter in company’s history, excluding Covid-related business. Given the demand, and its backlog hitting a new high, its management said timing could not be better for Avid to complete its mammalian cell facilities expansion that will provide new capacity.

The Myford South expansion has been turned over to operations and is now complete. The first customer is scheduled to start manufacture next month. In addition, new process development capabilities will be operational in a few weeks.

Micro-Cap Pharmaceutical Stocks Offer Another Way to Invest in the Industry

Another way to invest in biopharmaceuticals is through micro-cap stocks. That is the niche of futurist George Gilder’s Moonshots advisory service, which intentionally limits its circulation to enhance its exclusivity. The Moonshots track record has been sterling as an outperforming advisory service that may have a new pharmaceutical pick soon after Gilder and Senior Analyst Richard Vigilante recently returned from a trip to Israel to conduct due diligence on prospective investments.

Investors interested in micro-cap alternatives may appreciate knowing Moonshots’ portfolio companies jumped an average of 84%, double the gains of the NASDAQ, from July 2019 to February 2023, counting only closed positions. I am further feedback from globe-trotting Gilder and his team as they seek companies developing the kinds of new paradigms that investors crave.

Russia Downs U.S. Surveillance Drone Above International Waters Near Ukraine

A Russian warplane struck a U.S. surveillance drone above the Black Sea near Ukraine on Tuesday, March 14, hitting the drone’s propeller and causing its American operators to bring it down in international waters, the Pentagon reported. Until that incident, Russia and the United States had managed to avoid a direct confrontation despite the war in Ukraine.

Pentagon officials said the unarmed Reaper drone was on a routine reconnaissance mission when two Russian Su-27 fighter jets approached it about 75 miles southwest of Ukraine’s Crimean Peninsula, an area Russia has used to launching strikes against Ukraine. The midair clash is the first known direct contact between the Russian and American militaries since the war in Ukraine started last Feb. 24.

Johns Hopkins Stops Round-the-Clock Updates of COVID Cases and Death

Worldwide COVID-19 deaths rose to 6,881,955 people, with total cases of 676,609,955, Johns Hopkins University reported on March 10, its last day of collecting data about the pandemic after three years of round-the-clock tracking. COVID-19 cases in the United States reached 103,804,263, while deaths hit 1,123,836 as of March 10, according to Johns Hopkins University. Until recent reports that China had more than 248 million cases of COVID-19, America ranked as the country with the most coronavirus cases and deaths.

The U.S. Centers for Disease Control and Prevention reported that 269,650,596 people, or 81.2% of the U.S. population, have received at least one dose of a COVID-19 vaccine, as of March 8. People who have completed the primary COVID-19 doses totaled 230,142,115 of the U.S. population, or 69.3%, according to the CDC. The United States has given a bivalent COVID-19 booster to 50,821,425 people who are age 18 and up, equaling 19.7% as of March 8.

The four small-cap pharmaceutical stocks to buy provide growth potential despite the failure of two big U.S. banks, Russia’s downing of a U.S. surveillance drone, inflation and recession risk. The four small-cap pharmaceutical stocks may interest investors seeking exposure to drug companies that have a key role in the health care system.

Paul Dykewicz,, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of and, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. He is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is great gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many othersCall 202-677-4457 for special pricing on multiple-book purchases.

The post Four Small-Cap Pharmaceutical Stocks to Buy Despite Big Bank Failures appeared first on Stock Investor.

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Fed, central banks enhance ‘swap lines’ to combat banking crisis

Currency swap lines have been used during times of crisis in the past, such as the 2008 global financial crisis and the 2020 coronavirus pandemic.



Currency swap lines have been used during times of crisis in the past, such as the 2008 global financial crisis and the 2020 coronavirus pandemic.

The United States Federal Reserve has announced a coordinated effort with five other central banks aimed at keeping the U.S. dollar flowing amid a series of banking blowups in the U.S. and in Europe.

The March 19 announcement from the U.S. Fed comes only a few hours after Swiss-based bank Credit Suisse was bought out by UBS for nearly $2 billion as part of an emergency plan led by Swiss authorities to preserve the country's financial stability.

According to the Federal Reserve Board, a plan to shore up liquidity conditions will be carried out through “swap lines” — an agreement between two central banks to exchange currencies.

Swap lines previously served as an emergency-like action for the Federal Reserve in the 2007-2008 global financial crisis and the 2020 response to the COVID-19 pandemic. Federal Reserve-initiated swap lines are designed to improve liquidity in dollar funding markets during tough economic conditions.

"To improve the swap lines’ effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of seven-day maturity operations from weekly to daily," the Fed said in a statement.

The swap line network will include the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and the Swiss National Bank. It will start on March 20 and continue at least until April 30.

The move also comes amid a negative outlook for the U.S. banking system, with Silvergate Bank and Silicon Valley Bank (SVB) collapsing and the New York District of Financial Services (NYDFS) takeover of Signature Bank.

The Federal Reserve however made no direct reference to the recent banking crisis in its statement. Instead, it explained that they implemented the swap line agreement to strengthen the supply of credit to households and businesses:

“The network of swap lines among these central banks is a set of available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses.”

The latest announcement from the Fed has sparked a debate about whether the arrangement constitutes quantitative easing.

U.S. economist Danielle DiMartino Booth argued however that the arrangements are unrelated to quantitative easing or inflation and that it does not "loosen" financial conditions:

The Federal Reserve has been working to prevent an escalation of the banking crisis.

Related: Banking crisis: What does it mean for crypto?

Last week, the Federal Reserve set up a $25 billion funding program to ensure banks have sufficient liquidity to cover customer needs amid tough market conditions.

A recent analysis by several economists on the SVB collapse found that up to 186 U.S. banks are at risk of insolvency:

“Even if only half of uninsured depositors decide to withdraw, almost 190 banks are at a potential risk of impairment to insured depositors, with potentially $300 billion of insured deposits at risk.”

Cointelegraph reached out to the Federal Reserve for comment but did not receive an immediate response.

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MGM Shares Surprising Las Vegas Strip News

Two of the resort casino operator’s executives spoke at a recent event where they talked about Las Vegas’s covid comeback.



Two of the resort casino operator's executives spoke at a recent event where they talked about Las Vegas's covid comeback.

The Las Vegas Strip suffered during the covid pandemic when lights on the iconic 4.2-mile stretch of road literally went dark due to a government-mandated closure. Recovery, however, has been not exactly a straight line because the lingering impact of the pandemic has been a drag on some key business areas.

The two biggest players on the Strip -- Caesars Entertainment (CZR) - Get Free Report and MGM Resorts International (MGM) - Get Free Report -- have both had to make decisions without being able to use the past as a guide. In most years, for example, you could make a reasonable guess as to how many people might visit the city during a major convention based on how many attendees that show had the past year.

DON'T MISS: Las Vegas Strip Faces a New Post-Pandemic Reality

Covid, however, changed that equation. Some companies have realized that maybe they don't need to spend the money on exhibiting or attending shows while others may have employees reticent to be in crowded spaces.

In addition, some major events -- like CES in 2022 -- saw attendance plummet at the last minute due to a spike in covid numbers. Add in that international travelers and some more-vulnerable populations have continued to be wary of travel and it makes planning a challenge for Caesars and MGM.

All of this has led to low prices for tourists and business travelers -- especially those who booked far in advance. That has been slowly changing, especially for major non-business tourist events like March Madness, the NFL Draft, and November's Formula 1 race (a weekend where Caesars, MGM, and the other Strip operators may break pricing records).

Rising prices and a rebounding convention business don't mean the end of Las Vegas as a value destination for tourists, according to MGM COO Corey Sanders, who spoke at the recent J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum in Las Vegas. 


MGM Expects a Convention Comeback (Just Not Yet)

Although Las Vegas has largely returned to normal after its covid disruptions, room rates at many Caesars and MGM properties remain below historic norms. That's at least partially because the convention business remained soft in 2022 and not having those huge blocks of rooms booked led to the casino operators generally keeping prices low.

That's expected to continue through 2023, according to Sanders, reported.

"With regards to convention, in particular with MGM, we’re going to be down a little bit this year. Some of it is strategic. We have made a decision that on weekends, we’ll put less convention business in our buildings,” he shared.

Fewer rooms booked for conventions generally means lower rates across the Strip.

Sanders said he expected 2023 to be a "decent" year for MGM's Strip convention business, but he believes that 2024 and 2025 will be stronger.

MGM Sees the Value of an Affordable Las Vegas

A convention business bounceback, however, does not mean an end to affordable Las Vegas Strip hotel rooms, according to MGM Senior Vice President Sarah Rogers, who joined Sanders onstage. She made it clear that MGM understands that the Las Vegas Strip must maintain its status as an affordable vacation destination.

“We still offer a relative value. That gap has tightened a little bit,” said Rogers. “Some of those drivers that have allowed us to sustain that are things like continued programming, improved product, and the suite offering that we have. So we’re comfortable that we still offer relative value.”

Sanders also pointed out that "much of the increase in traffic at Harry Reid International Airport in Las Vegas is attributable to economy carriers, meaning the travel costs to get to the U.S. casino hub are, broadly speaking, tolerable for a broad swath of customers,"'s Todd Shriber wrote. 


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The Growing Auto Loan Problem Facing Young Americans

The Growing Auto Loan Problem Facing Young Americans

Since the COVID-19 pandemic, Americans have taken on significantly more debt to buy vehicles….



The Growing Auto Loan Problem Facing Young Americans

Since the COVID-19 pandemic, Americans have taken on significantly more debt to buy vehicles. This is especially true for Gen Z and Millennials, who the Federal Reserve believes may have borrowed beyond their means.

In this infographic, Visual Capitalist's Marcu Lu visualizes data from the Fed’s most recent consumer debt update.

Aggressive Borrowing

The first chart in this graphic shows the growth in outstanding car loans between Q2 2020 (start of the pandemic) to Q4 2022 (latest available).

We can see that Americans under the age of 40 have grown their vehicle-related debt the most. It’s natural for Gen Z (ages 11-26) to have higher growth figures because many of them are buying their first car, but 31% is quite high relatively speaking.

Part of this can be attributed to today’s inflationary environment, which has pushed used car prices to new highs. Supply chain issues have also resulted in over 30% of new cars being sold above MSRP.

Because of these rising prices, the Fed reports that the average auto loan is now $24,000, up 41% from 2019’s value of $17,000.

Spiking Delinquencies

Interest rates on auto loans are typically fixed, meaning many young Americans were able to take advantage of the low rates seen during the pandemic.

Despite this, one in five Gen Zs say that their car payments account for over 20% of their after-tax income.

Shown in the second chart of this infographic, the amount of auto debt transitioning into serious delinquency is much higher for Gen Z and Millennials. Throughout 2022, these generations saw $20 billion in auto debt fall 90+ days behind.

The outlook for these struggling borrowers is bleak. First there’s inflation, which has pushed up the prices of most consumer goods. This eats into their ability to make car payments.

Second is rising interest rates, which make credit card debt—another pain point for young borrowers—even more costly. Finally, there’s student loans, which are expected to resume in summer 2023. Payments on student debt have been suspended since the beginning of the COVID-19 pandemic.

Tyler Durden Sat, 03/18/2023 - 14:30

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