AMGN

An Overview on Valuing Junior Biotech Companies — Does Clovis Fit the Bill?

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The biotech industry remains one of the most fascinating yet perplexing industries for investors. Anecdotes of the entry-stage biotech with a home-run new therapy are often romanticized, but the reality is the vast majority of molecules fail in various stages of clinical testing.  Due to the boom-bust nature of the industry, many are wary of investing in the space, and traditional valuation metrics are not as useful due to a large number of such speculative entities being in the pre-revenue stage. With this in mind, let’s take a glimpse into our thought process when evaluating upstart biotech companies. By Alexander J. Poulos Before we dig in, we feel a word of caution is warranted. Entry-stage biotechs (IBB) inherently come with … Read more

The Legal Battle Between Regeneron and Amgen Heats Up

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Image Source: Regeneron The legal battle between two of the titans of the biotech world heated up further with a recent ruling overturning the injunction of a critical asset. We are updating our thesis in light of current events. By Alexander J. Poulos Legal Battle Amgen (AMGN) is locked in a protracted battle with Regeneron Pharmaceuticals (REGN) and its partner Sanofi (SNY) over a potential patent infringement. The asset in question is Praluent which belongs to the PCSK9 inhibitor, which is approved for the patient class afflicted with heterozygous familial hypercholesterolemia or clinical atherosclerotic cardiovascular disease, which require additional lowering of LDL-C. The nexus of Amgen’s complaint is Praluent infringes on some of the intellectual property (IP) that backs its … Read more

Best in Biotech? Global Blood Therapeutics’ Promising Treatment for Sickle Cell Anemia

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We remain impressed with the depth of research conducted over a wide host of disease states. Though a molecule may appear to hold significant promise in the pre-clinical phase, we have often witnessed the unique ability of the human body to react to various treatments. Often an unwanted side effect can torpedo a treatment, thus relegating millions of dollars of research obsolete. However, if a promising molecule is brought to market, the payoff is often well worth the effort. Our goal is to sift through the various clinical data to unearth the most promising treatments with the understanding that nothing is assured until the FDA authorizes the product for marketing in the US. We believe we have identified a promising … Read more

Upadacitinib Posts Impressive Data for AbbVie

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Image Source: AbbVie In the pharmaceutical realm, the productivity of the clinical pipeline is essential to replace the loss of revenue due to an expiration of the patent life of a product. AbbVie is facing the monumental task of having to diversify away from the top-selling pharmaceutical product in the world with little in the way of assurances the transition will be a success. We are pleased with the recent data release on Upadacitinib as we view the molecule as AbbVie’s top R&D product. By Alexander J. Poulos Upadacitinib in Rheumatoid Arthritis AbbVie (ABBV) believes it can successfully transition its portfolio from top-selling product Humira over to its next-generation treatment. AbbVie’s Upadacitinib belongs to the novel class of JAK-1 inhibitors, … Read more

Canakinumab Posts Some Impressive Data For Novartis

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We remain impressed with the depth of the clinical pipeline that is currently being brought out to market by the Dividend Growth Newsletter portfolio idea Novartis. We closely follow the data delivered from clinical trials to gauge the potential for the pipeline; in the case of Novartis, we feel the strength of the emerging pipeline bodes very well for continued dividend growth over the next few years. In this piece, we will detail the clinical results for Canakinumab, as we feel the molecule will nicely complement Novartis’ burgeoning cardiovascular unit. By Alexander J. Poulos Canakinumab   Image source: Novartis Cardiovascular Disease (CVD) remains one the largest areas of need based on the sheer number of patients afflicted with some form … Read more

Gilead Sciences Finally Takes Out A Promising Biotech

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Image Source: Gilead We were generally pleased to see that Gilead Sciences has decided to put its vast cash hoard to use by acquiring a cutting-edge technology that will further its clinical pipeline. Though it has become fashionable for many in the investment world to engage in M&A speculation as to whom Gilead might finally acquire, our research focus has instead been on the fundamental case, and the inevitable decline in HCV sales seems to have stabilized with the company reporting a beat-and-raise quarter this past July. Based on the improved outlook, the vastly improved technical backdrop, and improved technicals, we added the company to the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. We also think Gilead has largely … Read more

Let’s Talk Business Analysis

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Valuentum’s Brian Nelson explains the benefits of combining both economic moat and economic castle analysis in business analysis. An excerpt from part II of Valuentum’s four-part investment education workshop. If you cannot see the video, please view the transcript below or select the link here. If you would like to purchase Valuentum’s investment education workshop, please visit the page here. Brian Nelson, CFA: “In business I look for economic castles, protected by unbreachable moats… (quoting Warren Buffett).” If you take out some of the prepositions, Warren Buffett looks for economic castles. So what we do is we provide the analysis associated with the Economic Castle rating. The Economic Castle rating is based on the academic framework that suggests that economic profit … Read more

Generic Drug Price Deflation Continues to Weigh on Shares of Teva

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Shares of former Best Ideas Newsletter portfolio idea Teva Pharmaceuticals have come under renewed selling pressure after reporting weak quarterly results due largely to deflationary price pressures felt in the generic drug division. Teva has been relatively powerless in stopping the trend. We had removed the shares from the Best Ideas Newsletter portfolio well before the last leg down, and the Dividend Cushion ratio warned of tremendous risk to the sustainability of the dividend far in advance. By Alexander J. Poulos and Kris Rosemann Generic Drug Deflation Teva Pharmaceuticals (TEVA) maintains its position as one of the world’s largest manufacturer of generic medications, but the marketplace for a generic drug differs from the market dynamics of the branded space. We view … Read more

Amgen’s Pipeline Continues to Disappoint

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Image Source: Amgen The ability to generate commercially-viable products via the clinical pipeline is crucial to grow profits and offset revenue declines from the loss of patent protection. We remain unimpressed with the progress shown thus far by biotech stalwart Amgen. Let’s review the clinical pipeline along with a consideration of the recently-released earnings report. By Alexander J. Poulos Clinical Pipeline We believe the three most promising molecules in Amgen’s (AMGN) pipeline in order of importance are Repatha, Evenity, and Erenumab. Amgen’s ability to develop and market these products will go a long way to shore up the top-line revenue as older products begin to face biosimilar challenges that continue to sap revenue and profits. Let’s examine each in further … Read more

Analyzing the S&P SPDR Biotech ETF

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ETFs are rapidly becoming the preferred investment vehicle to gain broad exposure to a particular sector. The biotech industry is no different with two distinct ETFs dominating the niche. The article discusses the unique characteristics of the SPDR Biotech ETF to determine the merits of the idea. By Alexander J. Poulos Introducing the S&P Spider Biotech ETF The SPDR S&P Biotech ETF (XBI) is a position weighted index with the top 10 components accounting for less than 25% of the overall assets of the index (see image below). The XBI differs sharply from its primary rival the iShares Nasdaq Biotech Index ETF (IBB) which is market-cap weighted with industry stalwarts such as Amgen (AMGN) accounting for over 8% of the … Read more