It’s so great having John as my Personal Investment 911. Even when he was navigating the current of his excellent Summit … it took him less than 3 minutes to answer my questions & guide me on my way. I’m underway & making hay … thank you, John.
Andy
Sarasota, Florida
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Mad Hedge Biotech and Healthcare Letter
December 17, 2024
Fiat Lux
Featured Trade:
(THE BIG BATCH THEORY)
(CTLT), (DHR), (RGEN), (AVTR), (NVO), (PFE), (LLY), (MRK)
If I had a nickel for every time someone said pharmaceutical manufacturing was boring, I could’ve started bidding against Novo Holdings for Catalent (CTLT) myself.
Sure, I’d still be $16.5 billion short, but you get the point—this deal is huge, and it’s about to make some smart money look even smarter.
Here’s the deal: Novo Holdings is shelling out $16.5 billion to snap up Catalent, a contract development and manufacturing organization (CDMO).
If that acronym sounds like alphabet soup, let me translate: CDMOs are where the real action happens.
These are the guys behind the curtain making sure your miracle drugs and life-saving treatments aren’t just ideas—they’re products hitting the market at scale.
The numbers don’t lie. The CDMO market sits at $146 billion right now.
Fast-forward to next year, and that balloons to $243.3 billion. By 2029, it’s cruising toward a cool $332 billion.
And if you think that’s impressive, just wait: the broader pharmaceutical outsourcing trend is nowhere near slowing down.
In 2014, Big Pharma still clung to in-house production for 66.3% of its output.
Today? That figure’s down to 51%, and dropping fast. Why? Because outsourcing lets the specialists handle the hard stuff—faster, cheaper, and more efficiently.
For investors, Catalent’s immediate upside is a no-brainer. The acquisition premium is pure gravy, but that’s not the whole story.
Rivals like Lonza Group (SWX: LONN) and Samsung Biologics are already feeling the heat.
The biologics CDMO market alone is expected to expand by $10.63 billion between 2024 and 2028, and you better believe those two are scrambling to stay ahead.
If you own shares, keep your seatbelt fastened. If you don’t, well… you might want to rethink that.
And here’s where it gets really interesting: Novo Holdings may be private, but its publicly traded golden child, Novo Nordisk (NVO), is set to ride this wave like a pro surfer.
They’re already a global powerhouse in biologics, and Catalent’s souped-up manufacturing capabilities are going to help them scale production with military-grade efficiency.
Lower costs, tighter operations, bigger margins—it’s like handing a Formula 1 car to an already championship-winning team.
So if you’re not watching Novo Nordisk stock, you’re doing it wrong.
Of course, it’s not just the big CDMO players who stand to win here. Companies like Danaher (DHR), Repligen (RGEN), and Avantor (AVTR) are quietly cashing in on this gold rush.
These firms supply the picks, shovels, and critical bioprocessing tools that CDMOs need to keep production humming.
As Catalent scales under Novo Holdings, demand for these essentials will go through the roof.
Zooming out, the pharma manufacturing landscape is evolving at a breakneck pace.
The CDMO market is expected to hit $530.3 billion by 2033, growing at a steady 7.7% CAGR.
That’s not speculative growth—it’s a structural shift, backed by demand for biologics, gene therapies, and personalized medicine.
In short, we’re entering an era where outsourcing is king, and companies with the infrastructure to capitalize on it are poised to dominate.
Don’t forget about the big dogs in Big Pharma, either.
Pfizer (PFE), Eli Lilly (LLY), and Merck (MRK) aren’t just spectators in this game. They’re snapping up CDMO capacity, investing in biologics, and doubling down on therapies with blockbuster potential.
The Catalent deal is just the latest chess move in a game where the stakes keep getting higher.
So what does this mean for you? If you’re holding Catalent, congratulations—your portfolio is about to get a nice bump.
But the real play here isn’t Catalent alone. It’s understanding that CDMOs, suppliers, and adjacent players are the unsung heroes of this industry transformation.
You want exposure to the companies enabling the next wave of medical innovation? This is where you look.
Novo Holdings just threw down the gauntlet, and the smart money is already moving. The pharmaceutical manufacturing sector isn’t boring—it’s booming.
So, while everyone’s chasing flashy biotech startups and blockbuster drugs, the real smart money is quietly following the companies that make those breakthroughs possible.
Catalent isn’t just a $16.5 billion deal—it’s proof that outsourcing is the new backbone of pharma’s future. Call it “The Big Batch Theory:” scale up, outsource smart, and watch the returns multiply.
Ignore this shift, and you’re leaving money on the table.
Now, if you’ll excuse me, I need to check my CDMO positions. Just like a perfectly run batch, they’re growing fast—and that’s exactly how I like it.”
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Global Market Comments
December 17, 2024
Fiat Lux
Featured Trade:
(I’M TAKING OFF FOR THE YEAR)
By the time you read this, I will be 200 miles off the west coast of Mexico on the Coral Princess. I’ll be occupying the spacious owner’s suite and packing all three of my tuxes (and all my black socks) just to make sure I am never underdressed.
You see, I need a vacation.
I have been working nonstop for decades and desperately need a break. It seems that the older I get, the more I know the more in demand I become. Why quit taking tests when I already know all the answers?
You can tear up your Rolodex card for me, unfriend me on Facebook, designate my email address as SPAM, and block my Twitter account. It won’t do you any good.
If I don’t take some time off, I am going to start raving MAD!
Over the last 17 years, I have worked the hardest in my entire life. And the last year, I have had to work with a bullet wound in my hip courtesy of the Russian Army in Ukraine. Whenever I have free time, I go fight a war. That’s who you want calling your trades.
This year, I have brought in a total return of +75.25%, versus +27% for the S&P 500, far and away among the best of my life and almost certainly yours as well. If you got half of my performance, you beat virtually everyone else in the industry, even the best hedge funds. In other words, I underpromised and over delivered….in spades. That is my way.
If you wonder why I do this, it’s really very simple. Read my inbox, and you would burst into tears.
Every day, I learn tales of mortgages paid off, student loans dealt with, college educations financed, and early retirements launched. I am improving lives by the thousands. That’s far better than any hedge fund bonus could offer me, although I wouldn’t mind owning the Golden State Warriors.
At this late stage in my life, the most valuable thing is to be needed and listened to. If that means becoming a cult leader, that’s fine with me. After all, the last guy to try this route got crucified.
When horrific uncontrollable wildfires broke out in California, I flew volunteer spotter planes for Cal Fire, holding the stick with one hand and a pair of binoculars with the other, looking for trouble and radioing in coordinates, and directing aerial tankers. Nobody can fly wildfires like I can.
I lost access to my Lake Tahoe house when the big fire hit right in the middle of a remodel. All the contractors disappeared, chasing much higher-paying insurance work. At least we now have a 20-mile-wide fire break to the southwest of the house.
I have high hopes for next summer, starting with my seminar at sea across the Atlantic in June, then a trip on the Orient Express to Venice, another Matterhorn climb in July, client visits in Europe for August, flying Spitfires in England in September, and hiking the 170 mile Tahoe Rim Trail in October.
On top of all this, I was on speed dial at the Joint Chiefs and the US Marine Corps. A major? Really? And now I’m a major in two armies, the US and Ukraine. Seems you’re not the only one in desperate need of global macro advice.
So, I will spend the next 16 days reading the deep research, speaking with old hedge fund buddies, the few still left alive, and trying to come up with a game plan for 2025. One thing is certain: we will likely make a lot more money next year, the setup is so clear. Market volatility is about to go through the roof.
Instead of sending out urgent trade alerts, emergency news flashes, and more research than you can read, I’ll be playing Monopoly and Risk, practicing my banjo, and catching up on some classic films.
I already have one trade-on: I’ll watch Elf for the millionth time if the kids watch Gary Cooper’s 1949 Task Force, the history of Naval Aviation (semper fi).
In the meantime, I’ll be running some of my favorite research pieces from the past over the next two weeks. Hot Tips will include the same.
So, everyone, please have some great holidays, spend your monster Tesla profits well, and get well rested.
We have some serious work to do in 2025.
Merry Christmas and Happy New Year,
John Thomas
CEO and Publisher
The Diary of a Mad Hedge Fund Trader
Selling Christmas Trees for the Boy Scouts
Hi John,
Wow, what an incredible year for you!
We love your stories and adventures. I truly know of no one who lives life to the fullest as much as you do. Congratulations! You give us all something to shoot for and making each day count. We certainly hope you and your family are well.
I’ve enclosed a small gift, four pounds of French style Pecan pralines made here in our own kitchen. Just don’t eat it all at once.
All of your members are so happy that you are trying to make the financial world a little better for them. I am sure your Marine dad would be very proud of what you are doing, but not surprised.
We are always here for you. You do an amazing job!
Dodd
Denver, Colorado
“What the Fed has done is pulled forward several years of stock appreciation into just a couple of months. I think stock prices are too high,” said Jonathan Golub, chief US equity strategist of Credit Suisse.
