Pharming Group NV (AEX:PHARM): Set For A Swelling Growth In 2020

Hereditary angioedema is a rare genetic condition which occurs in approximately 1 in 30,000 people worldwide. Symptoms include episodes of swelling in the hands, feet, abdomen, face and airway. Patients may suffer bouts of excruciating abdominal pain, nausea and vomiting that is exacerbated by swelling in the intestinal wall. Airway swelling is particularly dangerous and can lead to death by asphyxiation. Untreated, attacks can last between 48 and 120 hours and can be fatal.¹ The severeness of this disease is exactly the reason why Ruconest is such a great medicine, why Pharming Group was only profitable in 2018 and almost doubled its EPS in 2019.

This success is attributable to superior leadership by Sijmen de Vries who bought the commercial license for Ruconest back from Valeant Pharmaceuticals in 2016. Recently Pharming Group announced that it also bought the Ruconest commercial license for another 36, mainly EU, countries. This will instantly increase their profitability and proves yet again the supreme leadership of this well managed company in an effort to boost their growth. Interesting fact: CEO’s can be accountable for up to 30 percent of variance in ROA (Crossland et. al., 2007).²

If Pharming Group is able to grow their market share and revenue like they have been the last few years, this stock is up for a big jump. The right leadership and an increasing workforce could guide them to additional indications for Ruconest and the broadening of their pipeline. In combination with an increase in R&D spending recent years this could potentially be the next Galapagos (AEX:GLPG).

Disclaimer: The writer of this article holds Pharming Group NV (AEX:PHARM) stock, this article should not be interpreted as investment advice or anything like that.

Bibliography

1) Pharming Group NV, RUCONEST®. https://www.pharming.com/ruconest, Retreived on 12 Januari 2020

2) Crossland, C. C., & Hambrick, D. C. (2007). How national systems differ in their constraints on corporate executives: a study of CEO effects in three countries. Strategic Management Journal, 28(8), 767–789. doi: 10.1002/smj.610

Nanoviricides Inc. (NNVC): Nano Cap Stock On A Raid Fighting Viruses

The anti-viral therapeutics, that Nanoviricides (NNVC) calls nanoviricides, are designed to appear to the virus like the native host cell surface to which it binds. Viruses would not be able to escape the nanoviricide by viral mutations since they continue to bind to the same cellular receptor and thus would be captured by the nanoviricide. Using conventional drugs the escapism of viruses due to mutations is normally a major problem in the treatment of viral diseases. So the nanoviricides deactivate/destroy the virus, a thing which can’t be done by conventional medicines. There are some anti-viral medications already available using virucides-technology, but these are focused on the treatment of Hepatitis C and due to monopoly-positioning remain very costly for patients.

Figure 1 – Nanoviricides. (n.d.). A single nanoviricide micelle may be capable of completely engulfing a Virus Particle. Nanoviricide micelles self-assemble from multiple chains. A single chain micelle shown for convenience. Illustration not to scale.

Nanoviricides (NNVC) hasn’t started any clinical trials on humans yet, but their most advanced product, a dermal topical cream against shingles (NV-HHV-101) passed the safety animal tests and is going into clinical trials on humans soon if the FDA approves their test results filed in their IND application. This indication alone has an estimated market size in billion dollars range. The pharmaceutical company also develops several variations on this drug based on the same principle for the treatment of other herpes viruses, namely HSV-1 cold sores and HSV-2 genital herpes. Their IND application is likely to follow in 2020. The market size of their potential blockbuster drugs in the HerpeCide™ program are estimated into several billions to tens of billions of dollars.

However, investor should be careful investing in this stock since it is a very small and thus low financed company. It has a huge deficit and needs at least another two years to put their first drug on the market, not including potential delays and possible unsuccessful human clinical trials. And if it reaches Phase III clinical trials it needs some sort of cooperation with a bigger pharmaceutical company to continue its trials and get FDA approval. With a market cap of only 12 million and low on cash the company is at a crucial stage of their existence. If you want to make a huge splash buy now and help Dr. Seymour, co-founder and former CEO of NanoViricides, to finish the commercialization of this ground-breaking nanomedicine technology against viruses that he characterized as: “penicillin against viruses”.

Disclaimer: The writer of this stock does not own Nanoviricides (NNVC) stock, this article should not be interpreted as investment advice or anything like that.

Gold Outlook 2020

Last night after days of threats Iran attacked U.S. army bases in Iraq. By sunlight it became clear that what seemed to be a big development in the Iran and American conflict, was just a play by Iran. The rockets they fired at the bases were inaccurate, weak and very certainly ineffective. The bases could evacuate and go to the shelters long before the rockets hit the ground in Iraq. It was just a play performed by the Iran government to satisfy their people, but the Iran military is capable of doing much more, but were smart enough to not use their real strength against the superior state in this conflict. The emotionally driven gold course precisely showed this emotional rollercoaster. The stock price of gold reached $1611 dollar, but when it became clear that this was just a big act, gold declined at rapid pace down to $1556 at the time of writing. A drop like this could easily be expected, since temporary conflicts like this tend to only push up gold prices on the short term. Today the imminent threat seems over, maybe attacks on American and Saudi oil targets will push op gold slightly coming months, but only temporarily.

After the setback has found its level of resistance, the bottom level to be between the $1520-$1540 area, the gains of recent weeks will continue and gold prices will rise steadily. This increase remains fueled if the data stays weak and there are no signs of better outlooks, the possible Phase One trade deal will only slightly push down gold prices on the short term. In this deal most taxes imposed remain intact and further deals won’t be made before the presidential election and probably won’t be after that too. It seems that nothing stands in the way of a gold rally reaching to even greater heights. With monetary institutions weaker then ever there’s no safeguard protecting the global economy only dangers remain which could boost the price of gold like never before.

At the end of June The Golden Investor expects the gold course to be driven up by weak global trade and without munition in bazookas of central banks the level reached then will not be the ceiling for gold. This will drive the price up to the range of $1650-$1700 at the end of the year. And if an imminent threat of the economy bursts, either by a production crisis, rising interest rates, the cutting of pension funds, a malfunctioning repo-system or a further escalation of the American conflicts, the gold price could reach to over $2000 dollar. This will depend on the impact of a certain burst and which adequate measures will be taken. The Golden Investor remains skeptical and stays long on gold.

Disclaimer: The writer of this article owns gold stock, this article shoudn’t be interpreted as investment advice or anything like that.

“If The Entire System Collapses, The Gold Stock Provides A Collateral”

As readers of The Golden Investor probably know, gold is a typical safe-haven. When uncertain times start to hit and financial troubles seem to lie ahead, gold rises. The value of gold isn’t measured in the use of the commodity, it lies in its ability to function as hedge or speculation against possible losses. The value of gold is purely a practical and psychological one. It is abundant enough for coin-making, but still is rare enough to maintain its value. It does not rust or corrode and people love the shining color of it. Even though gold hasn’t got a very wide use, some is used in cellphones, gold has been a currency or valuable asset for thousands of years. This doesn’t say that gold nowadays is as valuable as it used to be. However because of the safe-haven characteristics of gold the commodity still holds value. It is relatively scarce material making it allegedly safe against inflation. In that perspective platinum and palladium seemingly are better options, but they are too scarce to function as currency or trade-able good in a world market. And where palladium seems like a good option due to its wide use in labs, this same usage could deteriorate when an innovation hits, making this commodity less necessary and valuable. Gold however is owned by all the powerful people worldwide. And not only powerful people, also central banks use gold ‘as back-up if everything falls apart’ to paraphrase The Dutch Central Bank.

“If the entire system collapses, the gold stock provides a collateral to start over. Gold gives confidence in the power of the central bank’s balance sheet. That gives a safe feeling.” – The Dutch Central Bank

With a decade full of quantitative easing by most central banks, it starts to look like the value of money (if it already wasn’t) has vanished. Money is only worth as much as we think it’s worth. And where most people are unaware of inflation or how it works, it seems like the tenfold increase of the monetary base in the last decade lies even further away from their imagination. A big rise in inflation hasn’t hit the real economy yet, but with bank reserves higher than ever, stock markets on two/three times higher than the post-financial crisis lows, real real-estate prices rising to 2007 highs, the global debt at extremely high levels, interest rates too low for pension funds to cover their spending and a rise in interest rates unbearable for lots of zombie-companies, this will only be a matter of time. What happens if the excess reserves created by quantitative easing do reach the real economy. What if a bank falls (see Deutsche Bank) and banks start to use their reserves? The decade of growth is over and the damage done is irrecoverable.

Disclaimer: The writer of this article holds gold stock, this article shoudn’t be interpreted as investment advice or anything like that.

Iran And America On Wartime

The last decades the Middle East has been a battleground for all world leaders to fight out conflicts. Joining conflicts in the Middle East seems like showing your power to the rest of the world. The battleground now seems to be Iraq. The neutral force between Iran and America whose main agenda was preventing escalation between the two countries is now at the center of the conflict. The drone-strike near Baghdad Airport on one of the most powerful and popular generals in the Middle East didn’t only split Iran and America apart but also killed all sovereignty of Iraq. And lets not forget, also five Iraqi’s were killed in the strike.

Today a red flag was raised in Iran, the blood-red flag is a sign of upcoming revenge on US targets. Since the American forces has been controversially pulled out Syria they look like an easy target for Iran. One thing is sure: retaliation is going to happen, many US-workers in Iran left as soon as the news went public. The Iranian government was already talking about 35 potential US targets. Will this conflict escalate further or will Iran back down?

“Always get even. When you are in a business you need to get even with people who screw you. You need to screw them back fifteen times harder” – Donald Trump in Thinking Big (2007)

Although Iran probably has nuclear weapons and the capacity to hit American targets (read Tel Aviv) with great strength, it will probably try to find minor targets to attack. American oil tankers are a likely target. Oil prices went up by more than three percent following the news. However there’s no need for fearing a World War 3 to happen. America has complete supremacy over Iran and this is something Iran knows too. This is probably what Donald Trump thought when giving green light to the attack. And lets be honest, Soleimani is supposedly responsible for the killing of hundreds Americans and allegedly planned more. Isn’t it refreshing to see a superpower like America showing its power to safeguard its people abroad? It almost seems like Western countries always take the high road when under attack, which is smart if you don’t want further conflict to happen but not if you are a proud man like Trump thinking about a presidential election.

bluebird bio (BLUE): Is This Bird Going To Fly?

Bluebird bio (BLUE) is a company whose main focus is on gene-therapy against severe genetic diseases and cancers. Their recent potential blockbuster therapy is called Zynteglo and is used against beta-thalassemia. Beta-thalassemia is a blood disorder that reduces the production of beta-globin, a component of haemoglobin, a protein necessary for the transport of oxygen to cells throughout the body. This lower production results in a shortage of oxygen in cells causing fatigue, dizziness, low concentration, an irregular and/or rapid heartbeat and many other severe symptoms. Zynteglo is used in patients who do not completely lack beta-globin and who are eligible for stem cell transplantation but do not have a matching related donor. Zynteglo contains as its active substance stem cells taken from the patients that have been genetically modified to contain a working gene for beta-globin.

Zynteglo is the first ever approved product in this category, surprisingly it was first approved by The European Medicine Agency. FDA-approval will likely happen in the near future, bluebird filed their application at the end of last year. The costs of Zynteglo will be 1.8 million dollars with the option to spread the costs over five years. The first patients to use Zynteglo will only have to pay if the therapy actual works. The present management of the sickness includes regular blood transfusions every two to four weeks and daily iron chelation therapy, this all can be avoided using Zynteglo. The major part of the patients using Zynteglo in the Phase-III trial have been transfusion-free for up to 56 months.

The biggest challenge for bluebird bio is to justify their high price-tag. Because of the complexity of the treatment only a small number of patients have been examined. With Phase-III results looking better than the Phase-I/II results this is nevertheless looking promising. However the long term durability of the treatment is uncertain. The treatment could potentially last a lifetime although bluebird bio is claiming 22 years of quality-adjusted lifestyle years for the most successful patients.

Currently bluebird bio is doing Phase I and II studies to the effect of LentiGlobin in the treatment of sickle-cell disease. Normally red blood cells are flexible and round allowing them to move easily through blood vessels. With sickle cell disease, those red blood cells are instead sticky and rigid which results in various intense symptoms. The blockage of blood vessels can cause strokes and infections. Moreover repeated blockages can lead to damage of organ systems and are the primary cause of a shortened lifespan in patients with sickle cell disease. Sickle cell disease is an inherited disease caused by a defect, a single mutation, in the beta globin gene that helps make adult hemoglobin. Bluebird bio is doing a study to determine if stem cells taken from the patients that have been genetically modified to contain a working gene for beta-globin works for these patients too. This could potentially be a big blockbuster too. The main problem here is again the probable high price-tag of this again relatively rare disease.

Overall gene-therapy is a hot topic in the biotech industry and we must keep our eyes on the developments. It will be interesting too see if bluebird manages to attract patients who are willing and able to afford this therapy. With its 1.8 million dollar price-tag it’s the second most expensive therapy in the world. If results end up being positive, bluebird bio (BLUE) stock could rise sky high and potentially be taken over by one of the big pharma companies.

Disclaimer: The writer of this article owns bluebird bio (BLUE) stock, this article shouldn’t be interpreted as stock investment advice or anything like that.

Lynas Corp Ltd (ASX:LYC): Rare-Earth Opportunity

Back then China held over 95% percent of the rare-earth market, in the years following companies who suffered from the shortage increased their interest in rare-earth miners outside China. But because rare-earth mining is a cost-intensive and has a hefty impact on the environment there hasn’t been a great rise of rare earth mines outside China. In fact, Lynas holds a monopolistic position as the only big and viable rare-earth miner outside of China.

American Reliance on China

The last rare earth miner in the USA went bankrupt in 2015, therefore, the American government started an initiative to stimulate rare earth mining in the United States. Where the miners used to be pushed out of the United States because of the environmental issues and regulations coming with rare-earth mining, now afraid of losing the essential supply of rare earths, the sector is welcomed back into the United States.

This summer the Australian prime minister met with Donald Trump, discussing this issue since rare-earths are essential elements not only in electric vehicles and mobile phones, but also important for national defense equipment like night-goggles, weaponry and laser systems. That’s why in November last year Australia and the United States signed an agreement to collaborate on the supply of these critical minerals. Not long after, the U.S. Army allegedly had plans to fund construction of rare-earth processing facilities. Lynas has also announced its intention to build a heavy rare earth separation facility, which would be the only facility of its type outside China. Where one may be built in Texas, since Lynas and Blue Line entered into a memorandum of understanding last year to built a processing plant in a joint-venture in the United States. They are expected to be one of the contenders for this funding.

Malaysian Troubles

The position Lynas Corp (ASX:LYC) holds looks good, however, on the short term there is still volatility possible since Lynas is currently in dispute with the Malaysian government. Their billion-dollar processing plant in Kuantan allegedly had a buildup of toxic and radioactive waste in a landfill on their site. The Malaysian government set new waste removal conditions for their license to end this long running dispute. In September Lynas Corp got a 6-month extension of their operating license which is set to expire on 2 February this year, although it’s clearly visible that the Malaysians are done with all the waste being dumped in their country. To calm the Malaysians Lynas made plans to make an initial processing plant in Australia that could remove some of the low radioactive material before the shipping of the metals to Malaysia for further processing. In September last year Lynas signed an agreement with the city of Kalgoorlie to look at potential sites for this plant.

The Golden Investor thinks Lynas Corp Ltd (ASX:LYC) is on a good way to resolve their problems with the Malaysian government and is despite all problems and Chinese pressure making a profit. Moreover, they hold good odds to expand their business to the United States which will further increase their strength.

Disclaimer: The writer of this article holds Lynas Corp Ltd (ASX:LYC), this article should not be interpreted as investment advice or anything like that.

Beyond Meat (BYND): Beyond Its Value or Vegetarian Leader?

Fears of increasing competition raised since other companies are developing similar products for a lower price. This is the biggest fear for investors, Beyond Meat’s price for its sausages and hamburgers are 5 times that of regular meat. Also, companies like Nestlé (SWX: NESN), Tyson Foods (TSN) (a former investor in Beyond Meat) and Impossible Meat compete on the same market. One could argue that Beyond Meat (BYND) has a first movers advantage and tries to identify itself as significantly different. The truth however, is that Beyond Meat (BYND) hasn’t achieved this status yet and big companies like Nestlé (SWX: NESN) are breathing in their neck. In recent years the vegetarian food market has been growing and companies like Nestlé (SWX: NESN) are getting more and more interested in this future-proof market. Nestlé can profit of their internal economies of scale. And along with its tremendous lobbying, marketing possibilities and long ongoing relations with producers it can be real threat for Beyond Meat.

Currently the stock has a 10D SMA of 75,61 and is seemingly stable on the short term. But as pictured above, there are a lot of challenges ahead. But luckily there are some interesting developments. Recently Beyond Meat (BYND) and Impossible Food (which hasn’t gone public yet) started a fierce battle on the restaurant and fast-food market. KFC initiated a test with Beyond Meat, and Subway announced a Beyond Meatball test at 700 of its restaurants in the US and Canada. At the same time Burger King started selling the Impossible Whopper in all its restaurants. It is beginning to look like restaurants either choose Beyond Meat or Impossible Foods in their craving to grab a bite of this growing market. But this is only encouraging the Spartan-like battle which will only grow in intensity in 2020.

The Coca Cola Case

For now we’re seeing an interesting contest reminding us of the classic Coca Cola-Pepsi rivalry. These two brands differ themselves of basic cola brands based on their marketing efforts and slightly better taste. The main difference is that these brands are at max three times as expensive as the cheapest brand. Beyond Meat can be seven times as expensive as similar natural meat and its taste isn’t free of debate. The question is if Beyond Meat and Impossible Meat are able to really display themselves as a good alternative to real meat. We know marketing can make up for a threefold in selling price, but if they are able to fill the rest of the gap we still have to see. The rest of the gap should come from their lower environmental impact and healthy imaging. But we shouldn’t close our eyes to the increasing rate of fires in The Amazon due to the surging soy-demand. Pushing the problem to another part of the world isn’t the same as resolving it.

Disclaimer: The writer of this article holds Beyond Meat (BYND), this article should not be interpreted as investment advice or anything like that.

Clovis Oncology (CLVS): A Big Splash or A Burn of Cash?

The stock has been extremely volatile ever since, several days it was the most traded stock on Wall-Street. The borrow fee exceeded 100% during this period indicating that short-selling Clovis Oncology (CLVS) stock is an expensive business. The stock borrow fee amount depends on how difficult it is to borrow a stock, another indicator that people are holding onto their stock and are carefully watching further developments.

So we know Clovis Oncology is a hot item, but is it worth buying? Clovis has got interesting potential. It’s main drug Rubraca (Rucaparib) has now only been approved as a Ovarian cancer drug, but initial sales numbers aren’t as high as expected. The main driver behind the bullishness is a potential expansion for Rucaparib to be used against other cancers such as prostate cancer, this could create multi-billion dollar revenue and thus blockbuster growth. For now, Clovis Oncology is still a loss making stock, however it beat EPS estimates in November. It is interesting to see if they manage to get a bigger part of the market and gain further momentum ahead in 2020. Clovis could be an interesting candidate as potential growth stock and since the pharma industry has been actively buying out cancer drug developers we remain interested in the course of this stock. It’s a big risk, big return kind of stock, be aware of a bumpy ride ahead.

Disclaimer: The writer of this article holds Clovis Oncology (CLVS), this article should not be interpreted as investment advice or anything like that.

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