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Healthcare And Biotech Outlook: Final Quarter of 2020

Healthcare And Biotech Outlook –Final Quarter of 2020

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This article was originally published by Prudent BioTech.

 
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PrudentBiotech.com ~ Biotech M&A 2020
 
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As the pandemic resurges, early vaccine trials are reaching the home stretch.
 
 
Vaccine results now pushed back to mid-to-late November at the earliest, and there have been delays in therapeutic treatments.
 
 
Healthcare overall has been burdened by the uncertainty on the Affordable Care Act, but biotechs and medical devices/services shine.
 
 
Biotechs are well-positioned to move higher after undergoing a few months of consolidation.
 
 
Both Biotechnology and Healthcare present attractive opportunities for material gains during the final quarter, in the absence of a contested election.
 

Market Pulse

Biotech indexes at the beginning of October were at the same level where they were at the end of May 2020. The 5-month sideways consolidation is setting up the stage for a strong rally higher once the market breaks out. And that can happen soon. Recently, we wrote about the Stock Market's March Higher irrespective of the election outcome and laid out the reasons. The end of the election cycle will extinguish a significant political risk that looms over the market during the election period. This will prove to be the catalytic event that shifts the market to its next leg higher. This can begin to happen in October as a firm polling gap can diminish the risk of a contested election.

Quest for a Vaccine

The race for a vaccine to overcome the first true pandemic the world has experienced in 100 years has brought in players from across the globe using different approaches. Many US companies are leading the charge.
PrudentBiotech.com ~
 
The beginning of the Fall season is changing the dynamics of the COVID-19 spread. The fatality rate in the US, already naggingly high, will begin to climb higher, while it has already begun to surge in the European Union and the UK.
PrudentBiotech.com ~
 
In many ways, the race for vaccines is now entering a very crucial home stretch for at least the early starters, with the expectation of trial data during this fourth quarter from three of the leaders - Pfizer (PFE) in partnership with BioNTech (BNTX), Moderna (MRNA), and AstraZeneca (AZN) in partnership with Oxford University.

Setbacks on Vaccines and Treatments

Vaccines are not a straight shot to success and it is routine to have scientific and trial setbacks. In early September, AstraZeneca vaccine trials were stopped. The trials were resumed in Europe and other locations, but a month later have still not resumed in the US. Last week turned out to be the one when several delays were announced on both vaccines and treatments. Johnson & Johnson (JNJ), a leading candidate with a Q1:2021 target date for Phase 3 results, reported a hold due to an adverse event, which can be unrelated to the vaccine. In an interesting coincidence, both the AstraZeneca/Oxford and the Johnson & Johnson vaccines are using the adenovirus vectors, a newer approach but not a novel one. If the JNJ hold also ends up being due to the same neurological event as Astra's, then it can trigger wider concerns about the approach. The remaining company in Phase 3 trials in the US, Novavax (NVAX), expects results in the first quarter next year. These setbacks leave Pfizer/BioNTech and Moderna, both using a novel RNA approach, as the most likely candidates to report Phase 3 trial results this quarter. Pfizer, which has been quite aggressive in its timeline for Phase 3 data release, expected its first efficacy data to be reported towards the end of October. However, last Friday, Pfizer stated that its safety data won't be available till mid-November, and if it's positive, the Company will apply for an Emergency Use Authorization (EUA). Moderna had slowed down its trials in order to get a more representative demographic mix, and can also be in a position to begin reporting trial data by early December. The setbacks are not just on the vaccine side but also on the therapeutic treatments being developed. Last week again, Ely Lilly's antibody treatment was halted over safety concerns. The two other leading players, Regeneron (REGN) and Vir Biotechnology (VIR), have also seen their trials progress at a slower pace, although Regeneron has now applied for a EUA with the FDA. Part of the reason for slower treatment trials has also been a greater focus of Operation Warp Speed on vaccines over therapeutics. Antibody treatments, if successful, are positioned both as a treatment as well as prophylactic or preventives like vaccines. Remdesivir, the repurposed treatment drug from Gilead (NASDAQ:GILD), received a thumbs-down last week from the World Health Organization (WHO) after a study of 11,000 patients did not show a benefit for COVID-19 hospitalized patients. Remdesivir costs $2,500 per treatment course, and even though the WHO results were published ahead of a peer-review, it does raise questions for the expensive drug's potential market reach.

Resistance to Being Vaccinated Can Prolong The Pandemic's Impact

The yearning for a vaccine is being weighed down with the burden of political interference that has diminished the trust in the process and the respective agencies. A full economic and social revival cannot occur until a majority of the population has been vaccinated, bringing down the infection rate to a level that makes it a manageable disease like the flu. Confidence is necessary for growth to be restored close to pre-pandemic levels. Presently, surveys are indicating that public trust has been eroded in the vaccine process even though a COVID-19 vaccine remains a priority for most. This has been due to the perceived undermining of scientific practices and federal agencies. Nearly a majority of people expect to wait once a vaccine is available to mitigate any safety issues.
PrudentBiotech.com ~ Vaccine
 
The first meeting of the Vaccines and Related Biological Products Advisory Committee for COVID-19 will be held on October 22 and will provide insights into the specific guidelines which will have to be met before approval. While no vaccine would have filed for approval by then, the Board will be in the news even in the days ahead as they publicly meet and review future filings and submit their recommendation to FDA, which is hoping that the public scrutiny of the process would begin to rebuild trust in the approval process.

Biotechs to Lead Healthcare Higher

The tight five-month consolidation has been masking a lot of biotech activity while preparing biotechs for an eventual powerful breakout.
PrudentBiotech.com ~ IBB Biotech Index
 
M&A has continued to strengthen in the second half and a couple of high-profile deals were announced over the past month. Industry giant Gilead Sciences made its largest acquisition by acquiring Immunomedics (IMMU) in a $21-billion deal for its coveted oncology drug, Trodelvy. Earlier this month, Bristol-Myers (BMY) announced the acquisition of MyoKardia (MYOK) in an $11-billion deal for its heart-condition drug, Mavacamten. On the same day, BridgeBio (BBIO) announced the acquisition of Eidos Therapeutics (EIDX) for $2.8 billion. M&A has been gaining momentum with each passing month in the second half. August had more M&A deals than the entire first half, while September eclipsed August.
PrudentBiotech.com ~ Biotech M&A 2020
 
As political risk and market uncertainty diminish after the election, including a clearer path to another round of fiscal stimulus, it is quite likely that the fourth quarter can be the strongest M&A quarter for the year. Biotech has always been an active industry group in the IPO market and has now become even busier, easily outpacing other industry groups. Through last week (Oct. 16), nearly 70 biotech IPOs have occurred this year raising over $15 billion. It's a seller's market and there is a strong risk-appetite for biotech stocks. While biotechs are the leading healthcare group and the largest one, representing more than 50% of healthcare companies, medical devices and services is also an area showing significant promise. But healthcare overall has lagged the major indexes and was up less than 4% at the beginning of October. Political uncertainty for healthcare has become elevated, as the court case, supported by the administration, to annul the Affordable Healthcare Act or Obamacare is due for a Supreme Court hearing in November, after the elections. With no concrete details of a potential replacement plan by the administration, the uncertainty is adversely affecting segments of healthcare. If the election leads to a change of administration, the ACA is expected to survive and expand, and that should help diminish the healthcare uncertainty. At some point, most likely after the vaccine program has become widespread and the pandemic under control towards the end of 2021 or early 2022, we believe the drug pricing issue will re-emerge. But that is not a near-term risk.
PrudentBiotech.com ~ Covid 19 medicine 2020
 

Conclusion

After leading the stock market recovery, biotechs have been tightly consolidating. We believe this will serve as a platform for the next leg higher as the election risk, discussed here, diminishes and dissipates in early November. As noted earlier, when an economy emerges from a recession, it is best to have at least a 1-2 year horizon and stay invested in stocks. Sizeable and relatively consistent gains are achieved in the earlier stages as the recovery eventually picks up momentum and consistency. The long-in-the-tooth old bull market risk is over and a new one has begun, and speculative segments are attractive when risk-taking appetite is strong. In the biotech second-half outlook, we had expected the Nasdaq Biotechnology Index to be up around 20% for the year. The biotech index at the beginning of the fourth quarter was up 11%. We believe it is quite likely that the index can double the returns during the fourth quarter if elections don't go into a prolonged contested mode. The S&P Healthcare Index (XLV) at the beginning of the final quarter was up 2% for the year. We believe healthcare overall can easily triple these modest returns by end of the year, and even approach 10%, if there is relatively more clarity on the path of the Affordable Care Act, and it is not rescinded by the Supreme Court. A few promising biotechs and other healthcare companies, some of which may be now or in the past part of the Prudent Healthcare or Prudent Biotech model portfolios, include Regeneron Pharmaceuticals (REGN), Seres Therapeutics (MCRB), Invitae (NVTA), ShockWave Medical (SWAV), Moderna, BioNTech, Revolution Medicines (RVMD), CareDx (CDNA), Celldex Therapeutics (CLDX), NovoCure (NVCR), Trillium Therapeutics (TRIL), TG Therapeutics (TGTX), Covetrus (CVET), Denali Therapeutics (DNLI), Kura Oncology (KURA), Cassava Sciences (SAVA), CRISPR Therapeutics (CRSP), Replimune (REPL), and Personalis (PSNL). Industry exposure can also be acquired through ETFs like the one tracking the Nasdaq Biotech Index, IBB, and another tracking the S&P Biotechnology Select (XBI). Healthcare investing, particularly biotechs, is volatile and high-risk. Investors should pursue a concrete investment strategy preferring a portfolio approach by investing in a basket of promising companies that can assist in managing risk and overcoming mistakes.
The post Healthcare And Biotech Outlook –<br>Final Quarter of 2020 appeared first on Prudent Biotech.

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Government

Fauci Net Worth Soared 66% During Pandemic

Fauci Net Worth Soared 66% During Pandemic

The net worth of Dr. Anthony Fauci’s household soared a whopping 66% over the course of the pandemic,…

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Fauci Net Worth Soared 66% During Pandemic

The net worth of Dr. Anthony Fauci's household soared a whopping 66% over the course of the pandemic, according to new financial disclosures obtained by OpenTheBooks.com. Fauci reported a Jan 1, 2019 net worth of $7,523,634. By Jan 1, 2022, it had grown to $12,677,513.  

Values are as of Jan 1 each year. Chart via OpenTheBooks.com

As director of the National Institute of Allergy and Infectious Diseases, Fauci was paid a 2021 salary of $456,028, making him the highest-paid employee in the entire federal government. His wife, Christine Grady, is chief bio-ethicist for the National Institutes of Health, does very well too, raking in a $238,970 salary last year.

Fauci is famously paid more than the president, and his wife collects more than the vice president. However, those hefty federal salaries aren't the only driver of the Fauci household's pandemic-era enrichment.

In 2021, Fauci was awarded the Tel Aviv University-affiliated Dan David Prize, which came with a $1 million check. The prize committee said Fauci "has been widely praised for his courage in speaking truth to power" during the Covid-19 pandemic.

The committee was apparently oblivious that Fauci was the power and routinely spoke falsehoods about everything from the usefulness of masking to herd immunity, the efficacy of vaccines, and NIH funding of gain of function research at the Wuhan Institute. 

As is customary, Fauci donated some of his prize money back to be awarded as student scholarships, but still pocketed $901,400, according to the financial statements reviewed by OpenTheBooks.com. 

Though it's chump change compared to the Dan David Prize, Fauci also scored $12,500 from both the Elliot Richardson Prize in Public Service and the Abelson Prize from the American Association for the Advancement of Science, and got $5,198 when he was named Federal Employee of the Year at the 2020 Samuel J. Heyman Service to America Medals ceremony.  

Fauci even did some moonlighting as an editor for McGraw Hill, taking home $100,000 for his work in 2021. 

There's no indication Fauci made any "shrewd" investments a la Nancy and Paul Pelosi. According to the financial disclosures, Fauci's portfolio comprises broad mutual funds with no individual stocks: 

"These funds were held in a mix of trust, retirement, and college education accounts. Fauci has an IRA worth $706,219 (up $67,700); a defined benefit brokerage account totaling $2,551,210 (up $147,688); and a revocable trust worth $7,014,197 (up $1,718,299). His wife’s revocable trust is worth $2,269,225 (up $306,406) and an IRA totaling $136,662 (up $16,385)," reports OpenTheBooks.com. 

OpenTheBooks.com has filed four federal lawsuits against NIH to pry loose additional details not only about Fauci but also about royalties received by other NIH employees.  

Though Fauci has announced he'll retire by the end of the year, the wheelbarrows full of taxpayer money will keep on rolling his way. When you're the highest-paid employee in federal government history and you've been on the federal payroll for more than 55 years, that'll make for an astounding pension of some $375,000 a year. 

It's emblematic of the whole miserable Covid-19 spectacle: Bureaucrats wallow in government money while ordinary people suffer the ever-mushrooming destruction caused by public health's catastrophic lockdown and mandate regime.  

Tyler Durden Thu, 09/29/2022 - 23:20

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Spread & Containment

This Thanksgiving, Supplies Of Turkey, Eggs, & Butter Will Be Extremely Tight In The US

This Thanksgiving, Supplies Of Turkey, Eggs, &amp; Butter Will Be Extremely Tight In The US

Authored by Michael Snyder via The Economic Collapse…

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This Thanksgiving, Supplies Of Turkey, Eggs, & Butter Will Be Extremely Tight In The US

Authored by Michael Snyder via The Economic Collapse blog,

If you love to cook, this upcoming Thanksgiving may be a real challenge for you.  Thanks to a resurgence of the bird flu, supplies of turkey are getting tighter and tighter.  Sadly, the same thing is true for eggs.  And as you will see below, reduced milk production is sending the price of butter into the stratosphere.  Thanks to soaring prices, a traditional Thanksgiving dinner will be out of reach for millions of American families this year, and that is extremely unfortunate.  Of course all of this is happening in the context of a horrific global food crisis that is getting worse with each passing day.  Yes, things are bad now, but they will be significantly worse this time next year.

The bird flu pandemic that has killed tens of millions of our chickens and turkeys was supposed to go away during the hot summer months, but that didn’t happen.  And now that the weather is starting to get colder again, there has been a resurgence of the bird flu and this is “devastating egg and turkey operations in the heartland of the country”

Turkeys are selling for record high prices ahead of the Thanksgiving holiday as a resurgence of bird flu wipes out supplies across the US.

Avian influenza is devastating egg and turkey operations in the heartland of the country. If just one bird gets it, the entire flock is culled in order to stop the spread. Millions of hens and turkeys have been killed in recent weeks. As a result, prices for turkey hens are nearly 30% higher than a year ago and 80% above pre-pandemic costs. Just as concerning are inventories of whole turkeys, which are the lowest going into the US winter holiday season since 2006. That means there will be little relief from inflation for Thanksgiving dinner.

In the months ahead, we could see tens of millions more chickens and turkeys get wiped out.

Egg prices have already tripled in 2022 and the price of turkey meat is up 60 percent.  Unfortunately, this is likely just the beginning

Turkey hens are $1.82 a pound this week, according to Urner Barry, compared to $1.42 last year and $1.01 before the pandemic. Meanwhile, wholesale egg prices are at $3.62 a dozen as of Wednesday, the highest ever, up from a previous record of $3.45 a dozen set earlier this year, said John Brunnquell, chief executive officer of Egg Innovations, one of the biggest US producers of free-range eggs. Consumers have seen prices for eggs at grocery stores triple this year, while turkey meat rose a record-setting 60%, according to a Cobank report.

Meanwhile, supplies of butter are steadily getting tighter as well

Lower milk production on U.S. dairy farms and labor shortages for processing plants have weighed on butter output for months, leaving the amount of butter in U.S. cold storage facilities at the end of July the lowest since 2017, according to the Agriculture Department.

Tight supplies have sent butter prices soaring at U.S. supermarkets, surpassing most other foods in the past year. U.S. grocery prices in August rose 13.5% during the past 12 months, the largest annual increase since 1979, according to the Labor Department. Butter outstripped those gains, rising 24.6% over the same period.

The trends that are driving up the price of butter aren’t going away any time soon, and so we are being warned to brace ourselves for “elevated” prices for the foreseeable future…

The forces at work in butter highlight the challenge of curtailing inflation. Economic pressures fueling high prices for livestock feed, labor shortages and other factors could persist, keeping prices for the kitchen staple elevated longer term.

To me, slathering a piece of warm bread with a huge chunk of butter is one of the best things about Thanksgiving.

And most of us will continue to buy butter no matter how high it goes.

But the truth is that rapidly rising food prices are forcing vast numbers of Americans to adjust their shopping habits.  Here is one example

For Carol Ehrman, cooking is a joyful experience.

“I love to cook, it’s my favorite thing to do,” she said. She especially likes to cook Indian and Thai food, but stocking the spices and ingredients she needs for those dishes is no longer feasible. “When every ingredient has gone up, that adds up on the total bill,” she said.

“What used to cost us $250 to $300 … is now $400.” Ehrman, 60, and her husband, 65, rely on his social security income, and the increase was stretching their budget. “We just couldn’t do that.”

The global food crisis is starting to hit home for many ordinary Americans, and we need to understand that this crisis is still only in the very early chapters.

David Beasley is the head of the UN World Food Program, and he is actually using the word “hell” to describe what is potentially coming in 2023

“It’s a perfect storm on top of a perfect storm,” Beasley said. “And with the fertilizer crisis we’re facing right now, with droughts, we’re facing a food pricing problem in 2022. This created havoc around the world.”

“If we don’t get on top of this quickly — and I don’t mean next year, I mean this year — you will have a food availability problem in 2023,” he said. “And that’s gonna be hell.”

The World Food Program keeps sounding the alarm, but very few of us in the western world seem to be taking those warnings very seriously.

People are literally dropping dead from starvation in some areas of the globe right now, and a new report that the WFP just released says that there are 19 “hotspots” where we could see a “huge loss of life” between October and January…

World Food Programme (WFP) and the Food and Agriculture Organization of the United Nations (FAO) are out with a new report outlining countries that “are either already starving or on the brink of disaster.”

WFP and FAO found 19 hunger hotspots worldwide, with most countries in Africa, the Middle East, and even some in Central America. They call for urgent humanitarian action between October 2022 and January 2023 to avoid “huge loss of life.”

Afghanistan, Ethiopia, South Sudan, Somalia, Nigeria, Yemen, and Haiti are labeled “hotspots of highest concern,” facing catastrophic hunger levels.

The sort of famines that we were warned about are already starting to happen right in front of our eyes, but most people simply will not care as long as they are not going hungry themselves.

What those people do not realize is that this global food crisis is going to continue to spread.

As supplies of food get tighter and tighter, prices will continue to soar and shortages will become more common.

We truly are in unprecedented territory, and the pain that is ahead will greatly shock all of the lemmings that just kept assuming that everything would work out just fine somehow.

*  *  *

It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.

Tyler Durden Thu, 09/29/2022 - 21:40

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Government

“Historic Levels Of Fraud”: US Watchdog Estimates $45.6 Billion Bilked From Pandemic Unemployment Program

"Historic Levels Of Fraud": US Watchdog Estimates $45.6 Billion Bilked From Pandemic Unemployment Program

A federal watchdog has found that…

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"Historic Levels Of Fraud": US Watchdog Estimates $45.6 Billion Bilked From Pandemic Unemployment Program

A federal watchdog has found that $45.6 billion may have been scammed out of the nation's unemployment program during the pandemic, as fraudsters used a variety of methods to commit fraud - including using the Social Security numbers of dead people, hard-to-trace emails, and the identities of prisoners who were ineligible for aid.

According to the Washington Post, a Thursday report by the inspector general for the Labor Department reveals that the program - which helped some 57 million families in the first five months of the crisis - became an easy target for criminals.

To siphon away funds, scammers allegedly filed billions of dollars in unemployment claims in multiple states simultaneously and relied on suspicious, hard-to-trace emails. In some cases, they used more than 205,000 Social Security numbers that belonged to dead people. Other suspected criminals obtained benefits using the identities of prisoners who were ineligible for aid.

But officials at the watchdog office warned their accounting still may be incomplete: They said they were not able to access more updated federal prisoner data from the Justice Department, and acknowledged that they only focused their report on “high risk” areas for fraud. The two factors raised the prospect that they could uncover billions of dollars in additional theft in the months to come. -WaPo

At least 1,000 individuals have been charged with unemployment fraud and related crimes, according to a Thursday announcement. DOJ director of covid-related enforcement, Kevin Chambers, described the situation as "unprecedented fraud," while the IG's office says it's opened roughly 190,000 related investigative matters since the beginning of the pandemic.

The new report highlights challenges faced by government watchdogs and regulators, two years after what became roughly $5 trillion in (inflationary) pandemic aid was printed in response to the worst economic crisis since the Great Depression.

Last week, federal prosecutors  charged 47 individuals from the Minnesota Somali community for allegedly bilking $250 million in Covid-19 federal funds meant for a child nutrition program, in what the DOJ described as the largest single fraud case related to pandemic aid to date.

Twitter via @LouRaguse

Meanwhile, federal investigators are looking into roughly $1 trillion in loans an grants designed to help small businesses.

"Hundreds of billions in pandemic funds attracted fraudsters seeking to exploit the UI program — resulting in historic levels of fraud and other improper payments," said Labor Department inspector general, Larry Turner.

Turner's office found that between March and October 2020, there were roughly $16 billion in potential fraud in key high-risk areas.

One lawmaker actually who's actually pursuing the fraud is Sen. Ron Wyden (D-OR), who chairs the Senate Finance Committee. Wyden praised the "strong effort to identify criminals," but stressed the need to overhaul the jobless benefits system.

"I’ve long said we need a national set of technology and security standards for state systems to better prevent this kind of fraud, and we’re going to keep working to get our reforms passed," he added.

Tyler Durden Thu, 09/29/2022 - 18:00

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