Biotech Performance, NASH & the Competition

Today's Biotech Trade

Today's, January 5th, 2017, biotech trading ended on a rather flat note - at least when compared to the previous day's trading. However, biotech, again, managed to outperform the rest of the market.  With big pharma earnings reports slated to begin next week, risk averse investors may begin to feel a slight itch for bigger returns.

Time Horizon	S&P500 Performance	NASDAQ Performance	NASDAQ Biotech	iShares Nasdaq Biotech ETF	S&P Biotech Select Industry Index	Cumulative Biotech Performance
Today Delta	-0.08%	0.20%	0.26%	0.31%	0.15%	0.34%

However, one must be wary before jumping into big pharma. There will likely be a very large and very swift correction coming some time down the road. The US cannot afford to keep tripling specialty pharmaceutical costs every 6 years. Although I don't see a short-term solution coming any time soon, my long-term view is that pharma will eventually get congressional attention that goes beyond subpoenas and testimony. This is not a can that can continue to be kicked down the road - not when Mr. Trump has his Twitter rifle ready to fire at anyone that dares to oppose him. The eventual down-turn that may come may not be as large as some suspect. This is because pharma is now pursuing a more streamlined approach to drug development. Instead of acquiring companies, big pharma has largely shifted development risk to small biotechs to bring value to the big-pharma bottom line. The recent acquisitions and partnerships in NASH highlight such a point. There are a number of pharma giants (This was a new company for me) that have recently take the plunge into NASH. With such a large competitive field, pharma has the opportunity to shop around for the best deals.


NASH Competitive Environment

For the past year I have studied NASH and immuno-therapy companies. I often see investors make irrational decisions on biotech investments (as evidenced by StockTwit's comments) without following the science. Over the past few days I thought it wise to revisit a table that I began to develop over a year ago. The original table was meant to be a comprehensive table that outlined everything about NASH. However, when I first presented the table to my business partner and biotech mentor I discovered that it was full of information, but was completely uninformative to the end user, biotech (specifically NASH) investors. Thus, I took my time to rethink and reformulate the table architecture into something that can be interpreted quickly. The table below is what I came up with - an actionable list that identifies upcoming/or past actionable dates and also takes into account what the clinical data in-vitro/in-vivo is telling us. Mind you, the interpretation of the recent data are my own. You should make your own interpretation of the significance of any and all events. Also, this table is much more comprehensive than what you see here. If you would like additional data, I can provide it upon request.







































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Full Disclosure:

I hold long-Term positions on $APHB, $GLMD, $DNAI, $ITEK, $ESPR, $CAPR, $CFRX, $KMPH, $GALT, $CNAT.