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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

Top Stories This Week: Gold Manipulators Go to Court, Silver’s Industrial Side in Focus

Catch up and get informed with this week’s content highlights from Charlotte McLeod, our editorial director.
The post Top Stories This Week: Gold Manipulators Go to Court, Silver’s Industrial Side in Focus appeared first on Investing News Network.

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The gold price held above US$1,800 per ounce this week, finishing the period around that level, which is down from last week’s July high point of around US$1,830. 

Marc Lichtenfeld of the Oxford Club is one market watcher who’s struggling to understand why gold isn’t doing better this year. We had the chance to speak this week, and he pointed to money printing, the impact of COVID-19 and inflation as factors that should be pushing gold to record highs.

So far in 2021 those elements have have failed to do the trick, and Marc said he sees a disconnect between the yellow metal’s traditional fundamentals and what’s happening in the market.

 

Dig In To Find Out The Latest Outlook On Rare Earth

   
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“There just seems to be a disconnect between what are the traditional gold fundamentals and what’s happening out in the world … it’s really difficult to try to figure out what is happening with gold and why gold isn’t at record highs” — Marc Lichtenfeld, the Oxford Club

Of course, some would argue that price manipulation is the reason gold isn’t moving, and this week there was more news on that front. Chat logs were released in a spoofing trial for two former precious metals traders from the Bank of America’s (NYSE:BAC) Merrill Lynch unit, and they show one of the traders bragging about how easy it is to manipulate the price of gold. The trial isn’t over yet, but in its opening arguments that trader’s attorney said he stopped spoofing after he found out it was illegal.

Looking over to silver, I heard this week from Collin Plume of Noble Gold Investments, who thinks industrial demand will help push the white metal above the US$40 per ounce mark in the next 12 to 18 months. Silver has struggled to pass US$30 so far this year.

Solar panels are one of silver’s key uses, but it’s also found in other high-tech applications such as electronics and electric vehicles. Collin isn’t aware of any commodities that can replace silver in its end-use markets, and with demand “through the roof,” he expects to see shortages of silver by next year.

With silver in mind, we asked our Twitter followers this week if they think its industrial or precious side is driving the most demand right now. By the time the poll closed, about 70 percent of respondents said they think the precious angle is more important.

 

Uranium Soared Last Year While Other Resources Tumbled

 
What's In Store For Uranium This Year? Find Out In Our Exclusive FREE 2021 Uranium Outlook Report featuring trends, forecasts, expert interviews and more!
 

We’ll be asking another question on Twitter next week, so make sure to follow us @INN_Resource or follow me @Charlotte_McL to share your thoughts.

We’re going to finish up with the cannabis space, where there was a major announcement last week.

A group of Democratic senators headed by Senate Majority Leader Chuck Schumer introduced a draft of the Cannabis Administration and Opportunity Act, which among other things would remove cannabis from the Controlled Substances Act. The long-awaited bill will need 60 votes to get through the Senate, and opinion is split on whether that will actually happen.

INN’s Bryan Mc Govern spoke with Dan Ahrens of AdvisorShares Investments, who thinks it has “no chance of passing,” but remains optimistic about prospects for American cannabis companies.

“No one should expect US (cannabis) legalization anytime soon. We should expect reforms; they’re not coming as fast as anyone would like to see, but everybody agrees we’re going to get some form of banking reform in the near future … we’ll see baby steps” — Dan Ahrens, AdvisorShares Investments

Why? In his opinion, these stocks remain undervalued compared to their Canadian counterparts, and are operating well even without federal cannabis approval. Any legalization progress would be a bonus.

Want more YouTube content? Check out our YouTube playlist At Home With INN, which features interviews with experts in the resource space. If there’s someone you’d like to see us interview, please send an email to cmcleod@investingnews.com.

And don’t forget to follow us @INN_Resource for real-time updates! 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

Profit from resource markets this year

   
Read our new report to get started!
 

The post Top Stories This Week: Gold Manipulators Go to Court, Silver’s Industrial Side in Focus appeared first on Investing News Network.

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Economics

Top 5 Rubber Stocks to Buy in 2021

Here are some of the best rubber stocks to buy right now. Increased demand and supply chain disruptions are putting pressure rubber prices.
The post Top 5 Rubber Stocks to Buy in 2021 appeared first on Investment U.

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When it comes to investing, all the attention tends to go to healthcare, tech and increasingly renewable energy. But these aren’t the only stocks on the block, and some old mainstays can also add value to your portfolio. One of those old, reliable industries is rubber: it always has some level of demand, and that won’t likely change anytime soon. But recent economic conditions make rubber even more intriguing than usual. One of the biggest uses of rubber is car tires, and sharp economic recovery is likely to mean a sharp demand for new cars. Hence, we may also see a sharp increase in demand for rubber as many people head to the dealer to buy a new car. There’s more to it than just the auto industry, of course. CNBC reported that disruptions in the supply chain are also causing major disruptions. And we use rubber for many different essential items, including personal protective equipment and countless other items. With increased demand and supply chain disruptions, rubber stocks are poised for a rise. Here are some of the best rubber stocks to buy:
  • Goodyear Tire & Rubber (Nasdaq: GT)
  • Trinseo (NYSE: TSE)
  • Michelin (OTC: MGDDY)
  • Carlisle Companies (NYSE: CSL)
  • Protolabs (NYSE: PRLB)
If you’ve never invested in rubber stocks before, you might be wondering if they are a good investment. Let’s consider that question before looking at each stock more closely. And if you want to see how your investment portfolio might grow, check out our free investment calculator.

Is Rubber a Good Investment?

Rubber can certainly be a good investment because it is nearly ubiquitous; it is used in many different products, including tires, footwear, pharmaceuticals, textiles and many other products. As Zacks notes, rubber is among the most profitable industries when it comes to natural resources. But rubber isn’t exactly the most innovative product. Perhaps it was decades ago, but these days, it’s something most of us are just used to seeing. We don’t really demand rubber so much as the products that contain it. Hence, it’s only when demand for those products increases that the demand for rubber spikes. And as mentioned earlier, we are at a point right now where many people are looking to buy new cars, and rubber’s use in tires could cause a surge in demand. However, these things can be very cyclical. The Zacks page linked above highlights this very well. There, you can see the rubber tires industry has a YTD performance of 42.90% compared to 16.09% for IVV, an S&P 500 fund. But as good as that sounds, the 5-year performance for rubber tires is -33.71% compared to 112.67 for IVV. Given the downside risk, rubber is probably best used as part of a balanced portfolio containing more well-round assets, such as funds like IVV.

Rubber Stocks to Buy Now

If you want to “bounce” your returns upward with rubber stocks, here are some of the best rubber stocks to buy right now. Keep an eye on them as the situation with the auto industry progresses.

Goodyear Tire & Rubber

Goodyear Tire & Rubber is a tire manufacturer that makes tires for a variety of uses. Tires for automobiles are one of the biggest uses of Goodyear tires. However, they are also used on buses, trucks, aircraft, motorcycles, mining equipment, industrial equipment and farm equipment. In addition to the Goodyear name, it also has Dunlop and Kelly tires under its belt. Goodyear has been around since 1898 and was the first global tire manufacturer to enter the Chinese market. It produces a range of tires, rubber products and chemicals across the U.S. and Canada.

Trinseo

Trinseo is a global materials company that manufactures latex, plastics and synthetic rubber. Notably, it produces plastic for Lego. When it comes to rubber, Trinseo produces styrene-butadiene rubber (SSBR). This material is primarily used in high-performance tires. In addition to Legos, its plastic is used in automotive applications, LED lighting and medical devices. Trinseo is growing rapidly, with 17 manufacturing and 11 research facilities worldwide. In addition, it is already seeing healthy revenue increases as it continues to grow. Its website notes Trinseo is “dedicated to making a positive impact on society,” and it will support the “sustainability goals of our customers in a wide range of end-markets.”

Michelin

Michelin is another name that is big in the tire manufacturing business, and the demand for new cars places it squarely on this list. In addition to the Michelin tire brand, the company also owns BFGoodrich and Uniroyal. BFGoodrich is a premium tire brand for sports cars, offroad vehicles and light trucks. Michelin is the largest tire manufacturer in the US and the second-largest in the world. It has 34 plans in two countries and had over $8 billion of sales in 2020. Its revenue has been increasing, as has its stock price. As the situation with the auto industry evolves, it will be interesting to see how Michelin fares.

Carlisle Companies

Founded in 1917 and based in Scottsdale, Arizona, Carlisle Companies is about more than just rubber. It is more of an umbrella under which there are a number of different operations. Its products and services include healthcare, commercial roofing, aerospace and electronics, lawn and garden, agriculture, energy, mining and construction equipment, and dining. Of course, there are many uses for rubber and plastic across these industries. In 2018, Carlisle Companies released a plan called Vision 2025 in which it detailed how it will continue to grow over the next 100 years.

Protolabs

Protolabs is an intriguing company. It produces low-volume 3D printed, CNC-machining, sheet metal fabrication and injection-molded custom parts. These parts are then used for short-run production and in prototypes. The company describes itself as the “world’s fastest digital manufacturing service.” It also provides rubber, metal and commercial plastics. Given its business model, it was able to produce several items during the coronavirus pandemic, including face shields, plastic clips and items used in test kits. They were in turn used in Minnesota hospitals, where the company is based.

More Investing Opportunities

The rubber stocks above might produce some big returns for investors. Although, there are many industries and stocks to choose from. So, here are some more investing opportunities and research… If you’re looking for expert analysis delivered straight to your inbox, consider signing up for Profit Trends. It’s a free e-letter that’s packed with investing tips and tricks. Whether you’re new or already an experienced investor, there’s something for everyone. The post Top 5 Rubber Stocks to Buy in 2021 appeared first on Investment U.

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Government

Biden Says New Cuba Sanctions Are “Just The Beginning” 

Biden Says New Cuba Sanctions Are "Just The Beginning" 

President Biden says the newly announced sanctions against Cuba are "just the beginning" after rare widespread protests took over multiple cities on the communist-run island starting…

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Biden Says New Cuba Sanctions Are "Just The Beginning" 

President Biden says the newly announced sanctions against Cuba are "just the beginning" after rare widespread protests took over multiple cities on the communist-run island starting earlier in July. In the Thursday fresh sanctions announcement Biden condemned "the mass detentions and sham trials that are unjustly sentencing to prison those who dared to speak out in an effort to intimidate and threaten the Cuban people into silence," according to a White House statement

Specifically these latest sanctions target the defense minister and the National Special Brigade of Cuba’s Interior Ministry (on top of broader decades-long US sanctions against the government and economy).

Cuban Americans at a protest in Miami, via AP

Biden said these two officials in particular are spearheading the crackdown on Cuban protesters. He suggested there's much more to come.

"This is just the beginning — the United States will continue to sanction individuals responsible for oppression of the Cuban people," Biden said.

The administration further said it's working to "restore internet access" in Cuba after widespread shutdowns were reported over this month as Cuban security forces struggle to gain control of the demonstrations, largely driven by an economy in tatters, food and fuel shortages, and severe mismanagement of the pandemic crisis. 

Currently, the US even prohibits remittances, barring Cuban-Americans from sending money to their families, with last year Western Union also shutting down all money-sending services to Cuba after the Trump administration re-imposed sanctions. 

The Biden White House since he took office has vowed to "review" Trump era policies, but so far has kept them in place and now even appears to be ramping up the pressure once again. He again hinted this week that there could be a policy change toward "easing" restrictions. 

Cuba has for its part alleged a foreign hand behind the recent protests, especially following the so-called "Cuban Twitter" initiative of the past decade, which was long ago exposed as part of Washington's covert efforts to stir unrest on the island. 

Tyler Durden Fri, 07/23/2021 - 20:40

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