"Investing now is like taking a shower while Norman Bates is somewhere in your house," said Jim McTague, a journalist at Barron's.
Mad Hedge Biotech and Healthcare Letter
January 16, 2025
Fiat Lux
Featured Trade:
(THE EYES HAVE IT)
(REGN), (SNY), (PFE), (BMY)
Last week, while waiting for my annual eye exam, I couldn't help but notice the parade of elderly patients shuffling in for their regular Eylea injections. My optometrist tells me these folks show up like clockwork every 4-8 weeks, rain or shine.
That's about to change, and therein lies a multibillion-dollar story.
You see, when Regeneron reported Q3 earnings on Halloween, boy, they sure had some treats for investors. Revenue hit $3.72 billion, up 11% YoY, with EPS coming in at a sweet $11.54.
But here's what really caught my attention: their cost of revenue was $1.762 billion, while R&D and SG&A expenses ran $1.271 billion and $714.4 million respectively.
Net income? A cool $1.34 billion. Not too shabby for a company whose main product is under siege from copycats.
Speaking of copycats, let's talk about Eylea. The original formula saw revenues drop 21% YoY to $1.145 billion – that's what happens when biosimilars crash your party.
This is where it gets interesting though: Eylea HD (think of it as Eylea's muscled-up big brother) jumped from a mere $43 million to $392 million YoY.
Sure, about $40 million of that came from wholesalers stocking up like it's Black Friday at Costco, but still – that's what I call a growth story.
I've been watching Regeneron since they were just a gleam in Wall Street's eye, and they've always had a knack for turning scientific breakthroughs into cold, hard cash.
Take Dupixent, their inflammation blockbuster co-developed with Sanofi (SNY). It just got FDA approval for COPD with an eosinophilic phenotype.
Why does this matter? Because we're talking about a $6 billion market opportunity here, folks.
About 36% of COPD patients have this particular flavor of the disease and trust me, there are more of them than you'd think still wheezing away on their old inhalers.
Want to know what else is cooking in their labs? They're working on antibodies that could make blood clots a thing of the past – think better than Eliquis, which pulls in $10 billion annually for Pfizer (PFE) and Bristol Myers Squibb (BMY). Their secret? Something called Factor XI, which could be a game-changer for the 1 in 5 patients at high risk for bleeding.
And because no self-respecting biotech can resist the siren call of the obesity market, they're also cooking up their own weight loss cocktail. Results won't drop until late 2025, but if they crack the code on keeping weight off AFTER stopping treatment, they'll have something Wegovy and Zepbound can't match.
The financials are rock solid, too: $2.012 billion in cash, $7.785 billion in marketable securities, and current assets of $19.334 billion versus current liabilities of just $3.661 billion.
They've generated $3.158 billion from operations in the first nine months of 2024 alone.
Yes, there's $1.984 billion in long-term debt, but with cash flow like that, it's about as worrying as a paper cut.
I've already started nibbling at Regeneron, and I'm looking to add more if it dips further. After all, this is a company that's proven it can grow revenues at upper single digits year over year while maintaining 25% free cash flow margins - the kind of numbers that make a value investor's heart skip a beat.
Sure, there are risks lurking around every corner – biosimilars nipping at Eylea's heels, Medicare negotiations that could squeeze margins, and clinical trials that might go sideways.
But with multiple growth catalysts and a pipeline that reads like a wish list for modern medicine, Regeneron's got more upside than my daughter's college tuition bills.
As my optometrist likes to say - in the land of the blind, the one-eyed man is king. But in the land of biotech, Regeneron's got a 20/20 vision for what's coming next.
Global Market Comments
January 16, 2025
Fiat Lux
Featured Trades:
(WHY TECHNICAL ANALYSIS IS A DISASTER)
(SPY), (QQQ), (IWM), (VIX)
(TESTIMONIAL)
At my Mad Hedge Miami Beach Luncheon, I heard an amazing piece of information from a guest.
Fidelity recently conducted a study to identify their best-performing clients.
They neatly fell into two groups: people who forgot they had an account at Fidelity and dead people.
It all underlines the futility of trading the markets without true professional guidance, something many aspire to but few actually accomplish.
Of the many thousands of online newsletters and trade mentoring services, I only know of three that actually make money for clients.
Those would be mine and two others, and I’m not talking about who the other two are.
It is an industry filled with professional marketers, charlatans, and conmen.
Let me point out a few harsh lessons learned from this most recent meltdown and the rip-your-face-off rally that followed.
The next five months are ones of historical seasonal market strength.
The big lesson learned this summer was the utter uselessness of technical analyses. Usually, these guys are right only 50% of the time. This year, they missed the boat entirely.
The biggest losers?
Algorithms, which used the decisive breakdown of the (SPY) in August to go heavily short.
If you did, you lost your shirt. The market just shed a couple more points, reversed, and then kept going, and going, and going.
This is why technical analysis is utterly useless as an investment strategy. How many hedge funds use a pure technical strategy and a stand-alone basis?
Absolutely none, as it doesn’t make any money.
At best, it is just one of 100 tools you need to trade the market effectively. The shorter the time frame, the more accurate it becomes.
On an intraday basis, technical analysis is actually quite useful.
Leave it for the kids.
This is why I advise portfolio managers and financial advisors to use technical analysis as a means of timing order executions, and nothing more.
Most professionals agree with me.
Technical analysis derives from humans’ preference for looking at pictures instead of engaging in abstract mental processes. A picture is worth 1,000 words, and probably a lot more.
This is why technical analysis appeals to so many young people entering the market for the first time.
Buy a book available for $5 on Amazon, and you can become a Master of the Universe.
Who can resist that?
The problem is that high-frequency traders also bought that same book from Amazon a long time ago and have designed algorithms to frustrate every move of the technical analyst.
Sorry to be the buzz kill, but that is my take on technical analysis.
I have a much better solution than forgetting you have a trading account, or dying.
Take Cunard’s round-the-world cruise.
I have been sailing with Cunard since the 1970s when the original Queen Elizabeth was still afloat.
I’ve lost count of how many Transatlantic voyages I have taken across the pond.
For a mere $16,669 you can spend 117 days circumnavigating the globe with Cunard from Southampton, England in their cheapest inside cabin (click here for the link.)
That includes all the food you can eat for four months.
On the way, you can visit such exotic destinations as Bora Bora, The Seychelles, Reunion, and Moorea.
Not a bad deal.
By the time you get home, you will probably earn enough in your investment account to pay for the entire trip.
Hope you enjoyed your cruise.
Correction? What Correction?
Thank you for the analysis of Nvidia (NVDA). I wouldn't have looked at them without your analysis.
I got in NVDA at $69 Nov 2 after it dipped 3-5% from the recent top, it exploded up on 11th Nov, +29% to $88, and eventually made it to $290!
More trade alerts to the people :)
Best regards,
Per
The Netherlands
“Risk control is the best route to loss avoidance. Risk avoidance, on the other hand, is likely to lead to return avoidance as well, said Howard Marks, founder of distressed debt giant, Oak Tree Capital Management.
Learning disabilities, such as dyslexia, dysgraphia, and ADHD, affect millions of people worldwide. These neurodevelopmental differences can create significant challenges in academic settings, the workplace, and everyday life. However, the rise of artificial intelligence (AI) is ushering in a new era of support and empowerment for individuals with learning disabilities. AI-powered tools are breaking down barriers, fostering independence, and unlocking potential that might otherwise remain untapped.
- Personalized Learning Experiences
One of the most significant ways AI is transforming the landscape for learners with disabilities is through personalized learning. Traditional education often follows a "one-size-fits-all" approach, which can be particularly challenging for those with learning differences. AI algorithms, however, can analyze individual learning styles, strengths, and weaknesses to create customized learning experiences.
- Adaptive Learning Platforms: These platforms use AI to adjust the difficulty and pace of lessons based on a student's performance. This ensures that learners are challenged without feeling overwhelmed, fostering a sense of accomplishment and motivation.
- Personalized Content Recommendations: AI can recommend relevant learning materials, such as articles, videos, and interactive exercises, tailored to a student's specific needs and interests. This helps learners stay engaged and focused.
- AI Tutors: AI-powered tutors can provide personalized guidance and feedback, helping learners master concepts at their own pace. These virtual tutors can be available 24/7, offering support whenever it's needed.
- Assistive Technology Powered by AI
AI is also revolutionizing assistive technology, providing powerful tools that enhance learning and independence.
- Text-to-Speech and Speech-to-Text: AI-powered text-to-speech software can read aloud digital text, making it accessible to individuals with dyslexia or visual impairments. Conversely, speech-to-text tools allow those with dysgraphia to dictate their thoughts and have them converted into written text.
- Real-time Language Translation: AI-powered translation tools can help learners with language-based learning disabilities understand and communicate in different languages.
- Writing Assistance: AI writing tools can assist with grammar, spelling, and sentence structure, helping learners with dysgraphia produce clear and concise written work.
- Note-Taking and Organization: AI-powered tools can help learners with ADHD stay organized by automatically generating notes, creating reminders, and managing schedules.
- Early Detection and Intervention
Early identification of learning disabilities is crucial for providing timely support. AI can play a vital role in this process.
- AI-powered Screening Tools: These tools can analyze data from various sources, such as academic performance, behavioral observations, and cognitive assessments, to identify potential learning disabilities.
- Predictive Analytics: AI algorithms can analyze patterns in data to predict the likelihood of a child developing a learning disability, allowing for early intervention and support.
- Enhancing Accessibility in the Classroom and Beyond
AI is making learning environments more accessible for individuals with disabilities.
- AI-powered Captioning and Transcription: Real-time captioning and transcription services make lectures, videos, and online content accessible to those with auditory processing difficulties or hearing impairments.
- Personalized Assessments: AI can help create assessments that are tailored to individual learning needs, providing a more accurate picture of a student's understanding.
- AI-powered Virtual Assistants: Virtual assistants, like Siri and Alexa, can help learners with disabilities access information, complete tasks, and navigate their environment.
- Empowering Individuals in the Workplace
AI is not only transforming education but also empowering individuals with learning disabilities in the workplace.
- Workplace Accommodations: AI can help employers identify and implement appropriate workplace accommodations for employees with learning disabilities.
- Assistive Technology in the Workplace: AI-powered tools, such as speech-to-text software and real-time translation, can help employees with learning disabilities communicate effectively and perform their job duties.
- Personalized Training and Development: AI can provide personalized training and development programs that cater to individual learning styles, helping employees with learning disabilities acquire new skills and advance in their careers.
Challenges and Ethical Considerations
While AI offers tremendous potential for supporting individuals with learning disabilities, it's essential to address the challenges and ethical considerations that arise.
- Data Privacy and Security: Protecting the privacy and security of sensitive data collected by AI systems is crucial.
- Bias and Fairness: AI algorithms can inherit biases present in the data they are trained on, potentially leading to discriminatory outcomes. Ensuring fairness1 and mitigating bias is paramount.
- Access and Equity: Access to AI-powered tools and resources should be equitable, ensuring that all individuals with learning disabilities can benefit from these technologies.
- Over-Reliance on Technology: While AI can be a powerful tool, it's important to maintain a balance between technology and human interaction. Human connection and support remain essential for individuals with learning disabilities.
The Future of AI and Learning Disabilities
The future of AI in supporting individuals with learning disabilities is bright. As AI technology continues to evolve, we can expect to see even more innovative and impactful applications.
- Brain-Computer Interfaces: These technologies could allow individuals with learning disabilities to interact with computers and other devices using their thoughts, opening up new possibilities for communication and learning.
- Personalized Medication Management: AI could help optimize medication management for individuals with ADHD, ensuring they receive the most effective treatment.
- AI-powered Emotional Support: AI-powered chatbots and virtual companions could provide emotional support and encouragement to individuals with learning disabilities, helping them overcome challenges and build self-esteem.
Conclusion
AI is revolutionizing the way we understand and support individuals with learning disabilities. By providing personalized learning experiences, assistive technology, and enhanced accessibility, AI is empowering learners to reach their full potential. As we continue to explore the possibilities of AI, it's crucial to address ethical considerations and ensure that these technologies are used responsibly and equitably. With careful development and implementation, AI can be a powerful force for inclusion and empowerment, creating a world where everyone has the opportunity to thrive.
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 Technology Letter
January 15, 2025
Fiat Lux
Featured Trade:
(TIKTOK COULD GET BANNED)
(CHINA), (TSLA)
