Positive Developments in the Biotechnology Market

*All content in this biotechnology blog represents the opinion of James O’Leary*

In recent weeks the biotechnology market has seen great changes, with the development of new medicines and medical software. The outcome has been an increase in interest in various companies and, by extension, an increase in the stock prices of these companies.

Incyte

A large market is developing for drugs that fight cancer through using the body’s own immune system. Incyte has developed a medicine, called Epacadostat, which does that and which has caused quite a stir among investors and some of the biggest drug makers in the world. The exciting development of this new drug has resulted in Incyte shares increasing in value by 76% in the last year, while revenue has jumped from just $1.1 billion to $28 billion in the same time period. In 2017 alone Incyte stock has increased 36% in value, making it one of the S&P 500 best performers of 2017 within the drug sector.

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(Please note: James O’Leary does not currently hold a position in Incyte. Henry James International does not currently own a position in Incyte for any client portfolios).

Invitae

Also making recent waves in biotech news is Invitae who have announced that they are launching a platform on which patients will be able to anonymously upload their genetic information, initially focusing on the information of cancer-related patients. The idea behind the development of this database is that more readily available data will allow developers to make bigger advancements towards important medical discoveries. Following the announcement of this new platform, Invitae’s shares increased in price by 2.79%, closing on the 6th at $11.05, while year-to-date the company stock has experienced a gradual rise of 39.17%.

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(Please note: James O’Leary does not currently hold a position in Invitae. Henry James International does not currently own a position in Invitae for any client portfolios).

Neurocrine Biosciences

The first product for treating the movement disorder Tardive Dyskinesia (TD) in adults has been developed by the company Neurocrine Biosciences. The announcement that the drug, Ingrezza, has been FDA approved was followed by a sudden 22% jump in Neurocrine stock prices, which closed at 24% on Wednesday 12th. At close on the same day Neurocrine’s shares were up 33% on a year-to-date basis.

(Please note: James O’Leary does not currently hold a position in Neurocrine Biosciences. Henry James International does not currently own a position in Neurocrine Biosciences for any client portfolios).

Other News in the Biotechnology Sector

Similar increases in other biotechnology companies have also been observed, according to Barrons, with iShares Nasdaq Biotechnology (IBB) shares having climbed 0.34%, Vertex Pharmaceuticals (VRTX) lifting 2.42% to $177, and Healthcare stocks increasing by 0.24%. Three companies in the biotech sector that investors should keep an eye on are Biogen (BIIB), Alexion (ALXN) and Gilead (GILD). Biotech Research Analyst Alethia Young from Credit Suisse has estimated that BIIB will report earnings per share (EPS) of $5.14 instead of the $5.02 that the consensus predicts, while revenue will be $2.79 billion rather than the average estimate of $2.75 billion. Likewise Young believes that EPS and revenue for GILD will be higher than consensus estimates, with $2.46 instead of $2.28, and $6.94 billion over $6.6 billion respectively. As for ALXN, it is predicted that it will meet expectations throughout the year, if not slightly exceed them.

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Several biotechnology companies have seen increases in stock value as they have announced new developments and, according to Christopher Raymond, Senior Biotech Analyst and Managing Director of Raymond James, the commercial outlook for biotechnology is on the whole positive for 2017.

(Please note: James O’Leary does not currently hold a position in any of the companies mentioned above. Henry James International does not currently own a position in any of the aforementioned companies for any client portfolios).

Brexit – What Now, Part 1

Just over two weeks since the Brexit results and the UK remains in a political limbo. Financially-speaking, however, things are beginning to calm down. After the initial shock, the markets have quietened, with the FTSE100 even moving ahead of where it was before the referendum in GPBs. It looks like Europe has survived the immediate, violent reaction and the focus now shifts to what continued uncertainty, and a withdrawal from the EU, will mean for the UK, and the rest of the world.

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The main industries affected

One of the most recent industries to take a hit was the property industry. House prices have fallen and property funds have suffered. Standard Life have suspended redemptions in its UK Retail property fund and has £2.9bn of assets under management. With London no longer seeming an attractive investment destination, Real Estate Investment Trusts have been hit too, with some dropping by as much as 20%.

Other industries hit include the Automotive, Airline, and Pharmaceutical. Of the 1.6 million cars manufactured in the UK, 77% are exported abroad, and over half of these to EU countries. UK-based airlines now have to rethink European routes and must recalculate fares, taking the new cost of visas into account. This is particularly hard for low-cost airlines like EasyJet, whose share price dropped 20%. It is not uncommon for UK pharmaceutical companies to carry out research and business overseas which will no doubt cause logistical issues but, more importantly, leaving the EU means the European Medicines Agency is no longer responsible for authorising UK pharmaceuticals which could mean slower approval for UK-manufactured drugs.