Some decent news this morning for the sector but not quite a robust reaction. Perhaps the sector needs to pause after its recent run or perhaps it will rally later but I would have expected a little more follow through. It is still early and regardless of the price action the sector needs to continue […]
February 13 Biotech Update
A relatively slow start to the week, so I will start off with perhaps the most (maybe only) meaningful fundamental news and then highlight another stock that is very likely under the radar. We have a couple of investor conferences which tend to focus on small caps, so there could be some pick up in […]
February 10 Biotech Update
So I think we need to be prepared for some more backlash and bad press given the decision by Marathon to think it is business as usual. So far the backlash has been isolated but it is difficult to see this not become a political talking point. 1. Marathon licensed an old, generic steroid (DFZ) […]
February 8 Biotech Update
Certainly some news for the sector and not great news but it seems to be having limited impact on the broader sector. In other words, people seem to be seeing GILD problems as isolated to GILD and not the broader sector but that is certainly something we need to watch. 1. I am very glad […]
February 7 Biotech Update
The sector (and I guess you could argue the market in general) has been pretty dull the past couple of days. During the past year these periods of no news led to a slow grind lower but it seems that the sector is holding up well if not grinding a little higher. It is only […]
February 3 Biotech Update
I was correct in my prediction that I would need to take care of a sick child (and still need to do so today but have some more time). It has been an interesting week but pretty much expected. I will circle around to what I saw as the most interesting and important events. 1. […]
Tax Inversions: Regulation Chasing Corporate Tax Loopholes Part 6
Proposed solution and conclusion Finally, I’d like to draw some conclusions and offer a different solution. First of all, it is clear that the corporate tax structure is way too complicated. Its provisions seem to be more focused on assuring tax revenue instead of focusing on economic efficiency and keeping America competitive in the international […]
Tax Inversions: Regulation Chasing Corporate Tax Loopholes Part 5
Proposed Policy Actions to curtail inversions All policy actions taken so far have been attempts at adjusting the tax code to greatly discourage inversion, but falls short of eliminating the incentive to invert. The Congressional Budget Office points to three policy options that are being considered for passage: Move significantly toward a purely worldwide system […]
January 31 Biotech Update
We had some earnings but the real potential mover of the sector is the meeting this morning with Trump. The headlines are still early but it looks like a net positive for the sector but we will see how it is interpreted. If history repeats these meetings tend to see some minor announced concession in […]
January 30 Biotech Update
Volatility is the name of the game with the daily flow of disruptive executive orders coming out of Washington but despite this the VIX has been going down and the market in general has been holding up well. At some point this disconnect will correct and it will not be a simple gap down (or […]
January 27 Biotech Update
We obviously got some news and price action but most of it is explainable and somewhat predictable. I will highlight some of the news and focus on the BMY report as that seems to have generated the most discussion. 1. We had the buyout of ALIOY a lot sooner than I expected at a lot […]
Tax Inversions: Regulation Chasing Corporate Tax Loopholes Part 4
The incentives to invert Now that we have determined that inversions are not in America’s best interest and that multinational corporations are now actively seeking to invert, we must critically consider how to stop inversions. However, it is prudent to first understand the full scope of the incentives to invert. Results have shown that inversion […]
January 25 Biotech Update
Tomorrow is our big earning day (will not be able to write tomorrow so look for an update on the news Friday) but today we at least had a positive earnings with NVS. While I am sure there will be tradable extreme moves, the sector is going to continue to need positive earnings and data […]
Tax Inversions: Regulation Chasing Corporate Tax Loopholes Part 3
A brief history of corporate tax inversion In 1982, McDermott Inc., an industrial company making nuclear reactor parts for the US Navy as well as deepsea oil and gas production facilities, decided to expatriate to Panama where one of their subsidiaries were located and renamed themselves McDermott International (Hines, 1991). This was done by having […]
January 24 Biotech Update
Still a slow start to the week especially for an earnings week. I will highlight a couple biotech points and one non-biotech. In terms of the non-biotech, I am becoming increasingly worried about the market in general. Keep in mind that one of the key advisors to Trump is Icahn who noted previously that the […]
Dave Trading – February 2017
*** David Sobek is a disciplined value investor. Using models, research, and fundamental data, David devises a value for biotech stocks, buys when significantly undervalued, and sells when significantly overvalued.*** As a reminder, this is my personal guide. You can alter it in accordance with your risk tolerance. >3 Standard deviations – No position 2-3 […]
Tax Inversions: Regulation Chasing Corporate Tax Loopholes Part 2
Corporate Tax impact on the Economy It is well documented through economic circles that taxes skew relative prices by shifting the supply curve to the left in a standard supply-demand model to create a deadweight loss. The deadweight loss is the area of the subsequent triangle with the endpoints at the pre-tax equilibrium, the supply […]
January 23 Biotech Update
There is not a lot of new news out this week but this is a week where earnings start, which could pick up the pace a little in terms of fundamental news. Two potential caveats. First, coming on the heels of JPM there is likely not a lot of new information to be provided. Companies […]
Dave-Trading Alert – CELG
I was still not exercised, but it looks like tonight our CELG options will be exercised. Monday, we will be selling the February $120 calls. We will have 200 CELG shares, therefore we will sell 2 calls. Right now they are priced at ~$1.18, but we will see their price on Monday. If you remember, […]
January 20th Biotech Update
We are getting some more offerings as is expected post JPM but they seem slower than usual. In any case, we have more large cap pharma news that is pretty meaningful that I want to focus on today. 1. BMY noted last night that they will not be pursuing accelerated approval for front line NSCLC […]
