Healthcare 01 (Jul 08 - Apr 15)

[winston]

YOU'LL WANT TO OWN THESE STOCKS WHEN THE MARKET RECOVERS

Bullish news from biotech: One of the market's most speculative sectors is "acting well."

Biotech stocks are a lot like mining stocks. Most of them have no earnings and no real assets... They're just wild dreams with stock tickers. But every five years or so, the public goes crazy for miracle cures and cancer drugs... to the tune of hundreds, even thousands of percent rallies. The busts that follow are just as spectacular (so trailing stops are vital).

The broad market's destruction began in mid-May. The S&P 500 is down 13% since then. Now, here's where the biotech story gets interesting...

One of the best ways to own biotech is the PowerShares Biotech ETF (PBE). This fund is loaded with the best companies whose names include "bio," "genics," or "ceuticals." During the gigantic selloff of the past two months, shares in PBE have held like a rock. When a speculative asset refuses to sink in a bear market, it's "acting well." That's an incredibly bullish sign.

We can't know when stocks in general will get on with a new bull market... But we can look at the action here and say, "When stocks get going again, you'll want to own some biotech."

Brian Hunt

[blid2def]

Wahlao the volume for this ETF... CMI lah. But, good to deconstruct it for ticker ideas.

[kennynah]

actually the other Biotech ETF that has a bit more volume is BBH.... it was spotted to be making an uptrend last week...but it dropped out of my radar

[winston]

By 2017, consumers and taxpayers will spend more than $4 trillion on health care, accounting for one of every $5 spent, the federal government projects.

The 6.7 percent annual increase in spending – nearly three times the rate of inflation – will be largely driven by higher prices and an increased demand for care, the Centers for Medicare and Medicaid Services said Monday. But other factors in the mix include a growing and aging population. The first wave of baby boomers become eligible for Medicare beginning in 2011.

Source: Associated Press

[winston]

THE MARKET LIKES HEALTH CARE AND BIOTECH by Brian Hunt

Our job is to show you the biggest-upside, lowest-downside investments in the world. That's why we've been writing about biotech lately.

We believe you could see biotech stocks gain hundreds of percent in the next few years. More so than any other sector, biotech tends to move in giant boom and bust trends. The signs of a new "boom" are popping up daily...

Loads of individual biotech companies are hitting new highs right now. The S&P Biotech ETF is regularly hitting new highs. The world's largest biotech firm, Genentech, is the subject of a huge buyout story. And here's this week's sign: new highs for the "big boy" of health care, Johnson & Johnson.

J&J is like a huge health care hedge fund. It frequently inhales small medical and drug companies. It receives revenue from drugs, medical devices, and consumer products. Said in English, J&J makes money by selling everything from Sudafed to scalpels to schizophrenia drugs. It's a terrific gauge of sentiment toward health care and drug investments.

As you can see from J&J's uptrend, sentiment toward the sector is good... which means it's "buy time" for the drug and biotech sectors.

[helios]

an interesting piece of news ... personally, i am doing research on ASX's ones, ie. CBB and RBY.

[winston]

The First "Screaming Buy" of 2008
By Dr. Steve Sjuggerud

"A New Age of biotech has begun... Here are the best ways to own it."

That's how biotech guru Rob Fannon starts off the just-released issue of his newsletter, Phase 1 Investor.

I trust Rob... He's the man I call when I want to talk about biotech stocks.

I like Rob in part because he isn't prone to hype. For the last few years, I've called Rob, asking him about biotech and pharmaceutical stocks, thinking they're cheap. But he kept telling me the timing wasn't perfect yet. It turned out, he was exactly right.

Now, after years of this, Rob says it's finally time...

I'm ecstatic to hear it. "If you just catch one biotech bull market in your lifetime, you may never have to work again." The latest issue of Rob's Phase 1 newsletter gives me more conviction that the major biotech bull market we called is here.

You really need to get on board... Though biotech stocks have started rising, it's still very early on. Really, nobody is paying attention.

For example, I remember listening to Rob Fannon speak at a private conference earlier this year. Rob said extraordinary things throughout his talk. Things like "This biotech stock will revolutionize its industry. And it's trading for less than its cash in the bank." But nobody got it... People were mesmerized by commodities stories, but couldn't care less about biotech. I took that as a sign that we were near the bottom.

Since then, the uptrend in biotech stocks has kicked in... And now Rob Fannon is excited again. It is exactly what I want to see.

I asked Rob about the Genentech buyout offer from Roche – the one that I called the "catalyst" for the sector back in July.

Rob said the Genentech bid "is a bad move for Roche... but it's terrific for the industry, for a couple reasons."

• First, big, profitable biotech companies like Biogen (BIIB), Gilead (GILD), Genzyme (GENZ), or Celgene (CELG) are perceived as safer ways to play biotech. Like Genentech, these companies already have drugs on the market that command premium pricing and offer multiple years of remaining patent protection. They could be takeover candidates as well.

• Second, once Genentech is acquired, $40 billion of money dedicated to biotech will need to find a new home. Investors will search for new spots to park this cash... We're seeing it already. Sector valuations are already on the rise.

According to Rob, the whole sector "is prone to swift surges of joy." An easy and diversified way to own biotech is through the SPDR biotech ETF (XBI). It holds mostly mid- and large-cap companies.

But Rob says the real money will be made in small-cap biotechs – like the ones he often features in his newsletter. He told his readers, "I'm betting the entire small-cap space could jump as high as 25% in the coming months. And that could be just the beginning..."

I trust Rob, who's finally bullish about biotech. Everything is lined up, as far as our "cheap, hated, uptrend" mantra goes. And the sector has just begun to rise. You haven't missed a thing.

In short, if you haven't bought biotech yet, buy it now! It's the first "screaming buy" of 2008.

[helios]

>>> Questions, Questions, who is Rob Fannon? and what is Phase 1 Investor?
>>> mmm ... a lot of Phase 1 drugs do not make it to Phase 2a, 2b, 2c, Phase 3 trials ...
>>> below is extracted from a blogger, Allan.

How Phase 1 Investor Can Make You Rich

A Phase 1 trial, as you probably know, is the first step in FDA clinical trials before a company can receive approval for a new drug or medical treatment.

The most profitable “Phase 1” developments are those made by small early-stage companies with BIG IDEAS that can change the face of business and have the potential to grow 500% to 1,000% – or more.

These are the kinds of ideas lead editor and analyst Rob Fannon pursues in Phase 1 Investor.

This name is fitting for Rob’s interest in medical technology—but also for the work we’ll be doing to investigate other technologies in early stages of development. Everything from high-tech gold and oil exploration developments, to breakthroughs in wireless technology, nanotechnology and much more.

Rob will act as the lead researcher on everything health related. He will use his contacts at the top universities, labs, and venture capital firms to report on new technologies outside of the health sector.

Rob joined S&A last year, but we’ve known him since 2003... and we’d been trying to hire him for just as long...

Why?

Because in biotech investing – more so than any other sector or style of investing – you need a specialized expert; someone qualified not only in financial analysis... but also in understanding the underlying science.

In an 18-month, accelerated program at The Johns Hopkins University, Rob earned both a Masters degree in Public Health and an MBA.

He’s also worked as a lab scientist at a biotech firm called Bioserve, doing genetic studies and research projects for the U.S. government.

Later, he helped the same company set up a new division in Hyderabad, India.

Rob worked at Cedars-Sinai Medical Center in Los Angeles – as a researcher in the hospital’s prestigious Comprehensive Prostate Cancer Research Program – alongside legendary physicians who have been profiled by CNN and USA Today. So in 2003 we hired Rob, on a part-time basis, to send us ideas as he discovered them.

At first we paid him a flat $5,000 per research report. But that was a bargain.

In two years as our consultant, Rob never offered us an investment idea that wasn’t a big winner.

For example, Rob was our lead analyst on our recommendation of Crucell.

Rob knew from his lab work that most companies make vaccines using chicken eggs, which has the potential to be very dangerous.

So Rob found a company called Crucell, which developed a new vaccine technology called PER.C6. It’s safer and faster than the existing vaccine methods, and could be used by dozens of companies. As a result, the stock has shot up 293% and is still rising (as of Jan. 2007).

Likewise, Rob was the source for Porter’s recommendation of Esperion, a company that developed a radical new way to treat heart disease. Here, Rob's expertise was critical. He'd worked in a lab down the hall from P.K. Shah at Cedars-Sinai Hospital and Research Center in Los Angeles. Dr. Shah was one of Esperion's clinical researchers. Rob knew how excited the clinical community was about Esperion's Phase II results, which showed the drug could remove arterial plaque, reversing heart disease. The company’s share price went up about 70% over the course of several months in 2003 when the company was in the midst of drug trials.

Porter recommended Esperion to his readers and, three weeks later, they had a chance to make 53% gains overnight when the company was sold to Pfizer.

Even including the past year – as head of Phase 1 Investor – he’s never closed a stock at a loss and his record barely even has a blemish -- of the 9 open picks in his portfolio right now, 9 are showing a gain with a 60% GAIN on average.(prices as of Jan. 2007)

Sure, there are a lot of people who can “talk” a big game when it comes to biotech investing but very, very few people come close to delivering. Rob always has.

The guy has never been wrong – not in three years covering the toughest sector in the stock market.

If you take just a small stake in each of Rob Fannon’s Phase 1 recommendations in the next 6 months. I believe that you can make MORE money than you’ve EVER made before, with any style of investing.

As Dr. Steve Sjuggerud, one of our most successful analysts, recently wrote in his advisory True Wealth: “Drug stocks are fantastic buys now. There have been only two times that drug stocks have traded cheaper than [they do right now]... ” and that was more than a decade ago.

Steve also believes biotech offers very low risk.

He writes: “No matter how deep into a recession we may go – people will still take their medicine. So the profits of drug companies are reliable. Their profit margins and growth rates are much higher, over a long period, than just about any other businesses.”

Jeff Clark, another of our best-performing analysts, agrees:

“Buying biotechnology is the best low-risk, high-reward trade in the stock market right now,” he wrote this month. “Under normal market conditions – maybe 95% of the time – biotech stocks [are way too expensive]. But that’s not the case today. Today’s conditions have created the best opportunity we’ve seen in biotech stocks in years. And now... biotech stocks are ready to run.”

Below are his 3 favorite recommendations right now (gains as of Jan. 2007):

PHASE 1 STOCK #1: This North Carolina biotech company is developing what could soon become the best new arthritis painkiller in America.

An FDA safety researcher recently called it the safest and most effective way to treat this disease.

When FDA approval for the drug comes through, this company could dominate the entire arthritis market... a $15 BILLION market for a company trading at just over $15 a share. Even better is Rob’s expert connection for this situation:

He visited company headquarters in North Carolina and met privately for almost an entire day with the CEO. Already, since Rob found it, the stock is UP 25%.

PHASE 1 STOCK #2: This small, little-known biotech outfit already has deals in place with Pfizer, Amgen, and Johnson & Johnson. It’s one of the new leading researchers for the emerging medical treatment known as “gene therapy.”

Its revolutionary technology is already being used to treat HIV, cancer, and heart disease – yet the company trades at an unbelievable bargain.

Rob’s expert connection: He had lunch with the former U.S. Government health researcher whose invention helped launch this company, visited the company lab in California, had a private breakfast and lunch with the CEO, and later spoke to the company’s VP of research and special expert Dr. Frank Giordano, a Professor of Cardiovascular Medicine at Yale University.

Already, since Rob found it, the stock is UP 18%.

PHASE 1 STOCK #3: This tiny company is the leading innovator in a new type of therapy for liver disease known as “HCV.” (San's notes: Hepatitis C Virus?)

All of its drugs are fully funded by a big pharma outfit – one of the biggest in the world. And it recently became part of a major $8 BILLION deal. The best part is, almost no one has heard of this situation yet.

Rob’s expert connection: He sent his research partner, Dr. George Huang, to the American Association for Study of Liver Disease. Here his colleague had a private dinner with the scientists, physicians and top experts involved with this field, and consulted them on the likelihood of the drug’s release.

Plus – Rob visited company headquarters in Boston, spoke privately to the CEO and founder (a well-known industry expert), grilled the company’s chief medical officer, and acquired research from a medical meeting held in Europe last spring – detailing critical data.

Already, since Rob found it, the stock is UP 2%.

The good news is: All three of these companies have a long, long way to go. That’s why I believe you have a rare opportunity to get in on some of the best overlooked Phase 1 companies in the world – by taking just a small stake in each.

[blid2def]

Here, check out this link in FDA:
-- http://www.fda.gov/CDER/HANDBOOK/

All the flowcharts, etc. that illustrate the development & approval process.

Then again, even after this gruelling process of scrutiny, things can still go wrong... When that happens, it's the shits for the drug companies.

Witness the case of Biogen Idec Inc. (BIIB) and Elan Corp. (ELN - ADR)... Taken to the cleaners after news of their drugs leading to brain diseases (excerpt here, visit link for full article):

Source: http://www.reuters.com/article/rbssPhar ... 1420080731

UPDATE 2-Biogen, Elan report Tysabri brain disease cases

By Deena Beasley and Bill Berkrot

LOS ANGELES/NEW YORK, July 31 (Reuters) - Biogen Idec Inc (BIIB.O: Quote, Profile, Research, Stock Buzz) and Elan Corp Plc (ELN.I: Quote, Profile, Research, Stock Buzz) have notified regulators of two new cases of a potentially deadly brain disease in multiple sclerosis (MS) patients being treated with Tysabri.

Biogen shares dropped about 23 percent in after-hours trading, while Elan's shares fell 45 percent in New York.

"This is going to have very broad, very wide ramifications for the commercial prospects of the drug because there's just a lot of uncertainty here," said Cowen & Co analyst Eric Schmidt.

Tysabri, co-marketed by Ireland's Elan and Cambridge, Massachusetts-based Biogen, was withdrawn from the market in 2005 after three patients developed the brain infection known as progressive multifocal leukoencephalopathy (PML).

The drug returned to the market in 2006 with warnings after the U.S. Food and Drug Administration decided MS patients willing to accept the risks should be able to have access to the drug's potential benefits.

[winston]

Enjoy the ride...

Many years ago, when the biotech sector went into euphoria, I shorted a stock that went from $36 to $3...