(LLY) Archives - Page 10 of 27 - Mad Hedge Fund Trader

Brain Gains

Let's talk about a golden opportunity knocking at our doors – the booming market of Alzheimer's disease treatments in biopharma. We're not just talking about a small uptick here. With a slew of new meds on the horizon, this market is gearing up for some serious growth, and you might want to grab a piece of this pie.

The dominant name on our radar is Biogen (BIIB), ticking at $260 per share with a market cap that's flirting with $39 billion.

Now, with a solid $10 billion in sales and trading at a nifty 16 times its 2024 estimated earnings, Biogen's got some serious mojo. I've been eyeing it since last year, but boy, have things changed since then.

A critical game-changer was Chris Viehbacher, the new CEO since November 2022. He's already played a couple of aces – slicing $800 million in costs (which, by the way, could pump up earnings by $5 a share by 2025) and wrapping up the acquisition of Reata Pharmaceuticals in September 2023.

This new addition to Biogen’s portfolio has a hot ticket item, Skyclarys, for treating Friedreich’s ataxia. It's a rare find, but it could add a cool $5 per share in earnings in a few years.

But the most exciting name in Biogen’s arsenal is Leqembi, the company’s Alzheimer’s treatment. They're splitting the pot with Eisai (ESALY), and this drug is a little like turning back the clock on cognitive decline – think a two-year rewind button.

The big bucks talk here: we're eyeballing $2 billion in revenue by 2028 and maybe a whopping $4 billion by 2033. And hey, there might even be more where that came from.

Let's chew on a few things here. Biogen has the potential to snag a 60% market share against Eli Lilly’s (LLY) donanemab – the only worthy opponent in the market so far. And given Leqembi's safety creds, this might be playing it safe.

Aside from Eli Lilly, there’s Roche (RHHBY), with candidates in Phase 2 and Phase 1 trials, but they're not quite hitting the jackpot yet. As for other competitors in the space like Regeneron (REGN) and Alnylam (ALNY)? Well, they're cooking up something different in Phase 1, but it's a bit early to call.

Meanwhile, Biogen's got another trick – a home-use version of Leqembi coming this fall. And get this: doctors are buzzing about nipping Alzheimer’s in the bud, way before it crashes the party. Imagine getting a jab of Leqembi as part of your routine check-up when you're only 50. If this works, then we could be kissing Alzheimer’s goodbye by 2040.

For the longest time, Biogen was like that one-hit wonder with its multiple sclerosis treatments. But now, they're swinging for the fences with the largest unmet health need out there. If Leqembi hits it big, and I mean really big, we could be talking about sales far beyond that $4 billion mark by 2033.

But let's not get ahead of ourselves. The big pharma world is about to hit a few speed bumps with a wave of patent cliffs from 2025 to 2029. That’s a headache for the likes of Merck (MRK), Amgen (AMGN), Pfizer (PFE), and Bristol Myers Squibb (BMY).

Biogen, though, is sitting pretty with two growth products and a pipeline that’s got pizzazz. Plus, they're a hot catch for any big pharma looking for a dance partner without stepping on regulatory toes.

As we roll into the next decade, keep your eyes peeled for investment opportunities popping up like daisies. And don't feel like you've got to jump on the first bandwagon that rolls by. This market's just stretching its legs, and today's champs might just be tomorrow's old news.

So, what's the smart play here? Spread your bets across a few horses in the Alzheimer's race, and make sure they're not one-trick ponies.

Eli Lilly, for instance, is more than just an Alzheimer's bet – they're making waves in diabetes and soon, obesity treatments. Biogen, despite its Alzheimer's experience, is a bit of a gamble, especially after its first drug's rocky start.

Remember, investing in Alzheimer's treatments now is like catching the early wave – it's riskier, sure, but the potential for a big payoff is there. This is an emerging market, and it's revving up for an exciting ride. I suggest you add these names to your watchlist.

January 18, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
January 18, 2024
Fiat Lux

Featured Trade:

(A WEIGHTY IMPACT)

(LLY), (NVO), (MRNA), (AAPL), (AMZN), (GOOGL), (MSFT), (META), (NVDA)

A Weighty Impact

Biotech Letter

Today, let's talk about something that's stirring up quite the buzz in the investment community, something that's not just about numbers and charts, but about potentially changing lives.

Now, I'm sure you've heard of Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), Meta Platforms (META), and Nvidia (NVDA). These tech titans aren't just playing around with gadgets and gizmos; they're digging deep into the world of knowledge to uncover stuff we didn't even know was missing. And let's be clear, this isn't just some fancy artificial intelligence show-off; it's bigger, much bigger.

But, recently, other industries aren’t letting tech have all the fun.

The pharma industry, led by stars like Moderna (MRNA), Eli Lilly (LLY), and Novo Nordisk (NVO), is on the brink of what I'd call medical miracles.

We're looking at treatments that might kick some serious diseases to the curb – illnesses that we thought were just part of the unlucky draw in the genetic lottery.

Admittedly, figuring out the real worth of these innovations is a bit like trying to nail jelly to the wall – traditional financial analysis scratches its head at this sort of thing.

But for those of you who don't mind a bit of a rollercoaster ride, investing in these themes could be as rewarding as finding a forgotten winning lottery ticket in your old jeans.

Let's chew on obesity for a second. It's a big deal, literally and figuratively. It's the root of all sorts of nasty stuff like heart disease and diabetes.

Here's where Lilly and Novo Nordisk come in, swinging like heroes with their weight-loss drugs. These aren't just your average diet pills; we're talking about drugs that could turn the tables on major illnesses and even some curveballs like Alzheimer’s and sleep apnea.

Lilly's stock has been on a joyride, up 77% in the past year. Sure, by the bookworms' metrics, it's overvalued, but if you ask me, those numbers are playing catch-up to what these drugs could really do.

For context, imagine if you had bought Amazon or Apple back when they were just a bookstore and a computer company. Looking at their history and trajectory, Lilly and Novo Nordisk could be cooking up something similar.

And with over 20 studies lined up in the next five years, Lilly's stock, hanging around $625, could jump to a cool $840 by 2028 if things go well.

Keep in mind that the obesity treatment market is huge, and I mean, really huge. We're talking over 100 million potential customers in the U.S. alone.

And get this: insurance companies, those penny pinchers, are likely to cover these drugs because they're cheaper than surgeries.

Getting down to the specifics with Lilly, they've been making waves in the weight loss market with Mounjaro, raking in a sweet $2.9 billion in just nine months. And with Zepbound, it's like they've hit the jackpot twice.

Still, it's not a solo race; Novo Nordisk is right there with Wegovy and Ozempic. The demand is so hot that there were shortages last year. Talk about being in high demand!

But here's where Lilly might just have the upper hand. Their molecule, tirzepatide, is like the Usain Bolt of weight loss drugs – up to three times more effective than Novo Nordisk’s semaglutide.

And with the market expected to balloon to $100 billion by 2030, we're just seeing the opening act of what could be a blockbuster show.

With all this obesity talk, it’s important to understand that Lilly is no one-trick pony. They've got a whole stable of drugs treating everything from lymphoma to ulcerative colitis. And with over 20 programs in phase 3 studies, they're not running out of steam anytime soon.

Plus, here's the cherry on top: Lilly isn't just about making money; they're sharing the love with a 15% hike in their dividend.

That means if you jump on the Lilly train by Feb. 15, you're in for a treat in early March.

So, is Lilly a solid bet for the long haul? It sure looks like it. The excitement around their weight loss treatments is just one piece of the puzzle.

With a variety of drugs in their arsenal and an impressive pipeline, Lilly isn't just a flash in the pan. Sure, there are the usual hiccups like patent expiries and pipeline flops, but with their portfolio, they look set to weather any storms and keep the growth party going. I suggest you buy the dip.

January 2, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
January 2, 2024
Fiat Lux

Featured Trade:

(FROM LIMPING TO LEAPING)

(LLY), (NVO), (PFE), (AMGN), (VRTX), (BMY), (CRSP), (NTLA)

From Limping To Leaping

Biotech Letter

The year 2023 in the biotechnology and healthcare world has been a rollercoaster with more dips than peaks.

While Eli Lilly (LLY) and Novo Nordisk (NVO) are hitting the jackpot with their new weight loss drugs, the rest of the healthcare sector is limping behind.

By year's end, the S&P 500 Health Care index had slipped by 0.4% since the start of the year, starkly contrasting the broader S&P 500's robust 24% growth.

That’s not just a minor setback; it's the sector's most significant underperformance in 30 years.

Fast forward to 2024. Conventional wisdom suggests healthcare stocks might lag in an election year. Why? Presidential candidates love to shake things up with healthcare reform promises, usually sending investors into a sell-off frenzy.

But this time around, the air is tinged with an unexpected optimism. After a year of hefty sell-offs, healthcare valuations have become irresistibly low, presenting a fertile ground for investment opportunities.

Plus, there's less regulatory uncertainty now, with major acquisitions like Amgen's (AMGN) of Horizon Therapeutics and Pfizer's (PFE) of Seagen sailing through without a hitch. And let's not forget the anticipated interest rate cuts could be a game-changer for the sector.

Interestingly, the typical election-year healthcare jitters might be less intense in 2024. After all, the likely presidential candidates are familiar faces, and the healthcare changes they've made (or not made) are well known.

Trump’s healthcare impact was minimal, and Biden has already pushed through significant drug pricing reform with the Medicare drug price negotiation program. This program, despite legal hurdles, is moving forward and has been priced into the market's expectations.

In a surprising turn of events, the Biden administration's recent move to potentially invalidate patents of some high-priced drugs didn't send investors running for the hills like it might have in previous years. It seems the fear of drug price regulation may be losing its sting.

Now, let's take a closer look at some of the healthcare sectors that are drawing attention.

Biotech has been in a slump since 2020, but things are starting to look up. The sector's last three-year downturn was in 1992, followed by a significant rebound.

Despite challenges like high capital-raising costs and a deluge of IPOs, biotech is showing signs of life. As these pandemic-era companies mature and produce valuable data, they offer both buying and selling opportunities.

M&A activity in biotech is also on the rise, and if interest rates fall, the sector's prospects look even brighter.

Keep an eye on Vertex Pharmaceuticals (VRTX), which is set to reveal more data on its experimental pain drug, and Amgen, which is awaiting data on its new obesity pill. CRISPR Therapeutics (CRSP) and Intellia Therapeutics (NTLA) should be on your watchlist, too.

Over in MedTech, the hype around GLP-1 weight loss drugs led to a sector-wide selloff.

The iShares Medical Devices ETF took a hit, dropping 13.9% by the end of October, but it started to recover in the last two months of the year. The GLP-1 concerns might continue to cast a shadow, but there's a growing sense that their impact might be more long-term, especially if interest rates fall.

In the pharma world, 2023 was a tale of two halves: Eli Lilly and Novo Nordisk on one side, with their successful weight-loss drugs and the rest trailing behind.

While the S&P 500 Pharmaceuticals index slightly declined, Lilly and Novo surged ahead with 56% and over 45% gains, respectively.

But 2024 might bring new challenges, especially for Lilly, as it rolls out Zepbound, its highly anticipated weight-loss drug.

For Novo, the focus will be on how Ozempic fares under Medicare's new drug pricing negotiations set to take effect in 2027.

The key to success in pharma now is finding companies with innovative drugs that promise revenue acceleration without the looming threat of patent cliffs. Pfizer and Bristol Myers Squibb (BMY), for instance, are under the microscope as they navigate impending patent expirations and strive to reassure investors.

In 2023, the healthcare market was a stock picker's paradise, especially given its complexity. The year ahead promises more of the same. Investors should be on the lookout for opportunities among stocks that underperformed last year but have solid fundamentals.

Despite the unpredictability of election years and the bumpy ride of 2023, the healthcare sector, buoyed by low valuations and potential rate cuts, is gearing up for what could be a significant turnaround this 2024. For savvy investors, this could be an opportunity not to be missed.

December 21, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
December 21, 2023
Fiat Lux

Featured Trade:

(UNLEASHING THE UNDERDOGS)

(NVS), (LLY), (PNT), (RYZB), (MRK), (ABBV)

Unleashing The Underdogs

Biotech Letter

Grab your notebooks because class is in session, and today's topic is radiopharmaceuticals.

Yes, you heard it right - radiopharmaceuticals. It’s not your everyday cocktail party topic, but it's certainly the buzzword in the biotech investing world. And let me tell you, the numbers are sizzling.

Venture capital deals in this sector have shot up by an eye-watering 550% to $408 million this year. Back in 2017, this figure was a mere $63 million. Talk about going from zero to hero.

The global market for these radioactive wonders zoomed past $5.2 billion in 2022 and is now racing towards an estimated $13.67 billion by 2032. That's a CAGR of 10.2% for the statisticians among us.

So, what's cooking in the radiopharmaceutical kitchen? Well, a lot, apparently.

Leading the pack are the heavyweights – Novartis (NVS) and Eli Lilly (LLY). Novartis has thrown its hat into the ring, making radiopharmaceuticals a showstopper in its oncology lineup. With stars like Lutathera and Pluvicto, they're not just playing; they're here to dominate.

As for Eli Lilly, they're playing catch-up but with style. They laid down a cool $1.4 billion for Point Biopharma Global — a biotech gem focusing on radioligand therapies. Notably, Point investors are playing hardball, waiting for a Phase 3 reveal.

Meanwhile, Eli Lilly's also buddied up with Mariana Oncology and its $175 million Series B – these guys are eyeing small cell lung cancer with a glint in their eye.

So, what does this mean for the investor universe? Well, in a nutshell, it's party time. Early-stage companies, especially those with their lab coats on in discovery and preclinical stages, are like magnets to investors right now.

There’s POINT Biopharma, which hails from Indianapolis, that went public on Nasdaq as of July 1, 2021. Remember the ticker symbol “PNT”? That's them, and they currently have roughly $1.33 billion in market cap.

Another promising option is Mallinckrodt Pharmaceuticals. These folks are into everything from specialty pharmaceuticals to, you guessed it, radiopharmaceuticals—an American-Irish charm, if I may say so.

Abdera Therapeutics, a Canadian startup (eh!), is also in the running. This company is all about precision radiotherapeutics. They're eyeing small-cell lung cancer, and they've got the funds to back it up.

And then there’s ARTBIO, with an impressive $90 million Series A six months post-launch.

There’s also RayzeBio (RYZB), which is based in sunny California. They're not just turning heads; they're opening wallets. This company raised a whopping $160 million in Series D last year and then sprinted towards a dazzling $311 million IPO just last September.

Between 2018 and 2023, US-based radiopharmaceutical companies attracted a hefty $1.2 billion in venture financing. The peak? A cool $262 million in 2021. And guess what? Most of this dough was for preclinical and discovery shenanigans.

But let's not forget the hurdles, particularly the supply challenges and overwhelming demand. Yet, despite these hiccups, the sector remains hotter than a summer in the Sahara.

Prior to this, ADCs (Antibody Drug Conjugates) dominated the conversation.

We witnessed Merck (MRK) confidently investing $4 billion in Daiichi Sankyo for their ADC prospects. Lilly was busy forming a cozy partnership with Mablink Bioscience. And let's not forget AbbVie (ABBV), which generously splurged $10.1 billion on ImmunoGen's Elahere.

To this day, ADCs are still the talk of the town. But here's the thing: radiotherapeutics might be the underdog next to ADCs, but they're catching up. Fast.

This sector is bubbling with potential, simmering with innovation. For investors and pharma bigwigs, radiopharmaceuticals are more than just a fad. They're the future.

So, what's the takeaway? Radiotherapeutics might not be grabbing the spotlight like ADCs, but they’re like that quiet kid in class who ends up acing the test.

Mark my words. This is one space in oncology that's set to make some serious noise in the coming years.

December 14, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
December 14, 2023
Fiat Lux

Featured Trade:

(EDITING YOUR PORTFOLIO)

(CRSP), (VRTX), (BLUE), (BEAM), (CRBU), (EDIT), (NTLA), (PRME), (VERV), (LLY), (REGN)

Editing Your Portfolio

Biotech Letter

In the world of biotechnology, the buzz these days is all about gene editing – a frontier that’s moving at warp speed.

While the journey from sequencing the first human genome took a staggering 13 years, companies like CRISPR Therapeutics (CRSP) have sped up the process, bringing their revolutionary "molecular scissors" concept to market in a mere decade.

It's a thrilling time for investors, with the potential for staggering returns, but the path is littered with clinical and regulatory landmines. This turns choosing the best stocks to put your money into a tricky challenge.

Recently, the FDA gave the green light to two groundbreaking gene therapies for sickle cell disease, developed by Vertex Pharmaceuticals (VRTX) in collaboration with CRISPR Therapeutics and by Bluebird Bio (BLUE).

This disease, predominantly affecting African-American communities in the U.S., has been a target for medical advancement for years.

While the approval is a landmark, it's not without its tremors. Bluebird Bio's stock took a nosedive by 33.9%, triggered by the FDA’s warning label about potential cancer risks linked to their treatment.

In contrast, the treatment by Vertex and CRISPR dodged such warnings, possibly giving it an edge in the eyes of prescribing doctors.

And then there’s the money side of things. Bluebird Bio missed out on a priority review voucher from the FDA, which they were hoping to sell to Novartis for a cool $103 million. That's a tough break.

Meanwhile, the Vertex and CRISPR therapy, now known as Casgevy, boasts the honor of being the first FDA-approved drug using the trailblazing Crispr/Cas9 technology. It's a Nobel Prize-winning innovation that's finally reaching the patients it promises to help.

The approvals of Casgevy and Bluebird Bio’s Lyfgenia, which arrived earlier than expected, mark a significant moment for patients with sickle cell disease.

Although priced in the millions, these treatments offer a potential one-time cure, replacing the traditional, complex regimens. Unfortunately, they are not without their challenges, involving intensive procedures, lengthy hospital stays, and chemotherapy.

This brings us to the investment side of things.

The gene-editing arena is brimming with potential, but it's akin to navigating a labyrinth. With no specific exchange-traded funds (ETFs) focusing solely on gene editing stocks, investors might feel like they're trying to find their way in the dark.

However, a diversified approach could be the lantern in this darkness.

Companies like Beam Therapeutics (BEAM), Caribou Biosciences (CRBU), Editas Medicine (EDIT), Intellia Therapeutics (NTLA), Prime Medicine (PRME), and Verve Therapeutics (VERV) are some of the key players in this space, each with its unique technological platform.

But it's not just the pure-play gene editors that are worth your attention. Giants like Eli Lilly (LLY), Regeneron Pharmaceuticals (REGN), and Vertex Pharmaceuticals have thrown their hats into the ring, making substantial investments in gene editing.

So, how should you play this? If it were my money, I'd spread it around.

Put a chunk in leaders like CRISPR and Intellia. Then, combine these with established players like Eli Lilly, Regeneron, and Vertex to provide a safety net, balancing out the inherent risks of this high-stakes biotech game.

On the other hand, companies like Beam and Verve, representing the next wave of this technology, should not be overlooked, though perhaps with a more conservative stake.

And here's a little hedge for you: keep an eye on smaller players like Caribou Biosciences and Editas Medicine. In this high-stakes game, they could be your ace in the hole.

The gene-editing industry is a roller coaster of innovation, risk, and potential. It's a sector where fortunes can be made and lost in the blink of an eye.

For the savvy investor, a diversified, strategic approach, blending the bold with the stable, could be the key to unlocking the vast potential of this exciting field.

Remember, as with any investment, the key is not just in choosing the right horses but knowing how to spread your bets across the race.