Saturday, May 11, 2019

IBI Industry Trends: Important Ramifications From The Amazon Acquisition Of PillPack

Summary
Due to the PillPack acquisition, Amazon will reduce the service demand for traditional brick-and-mortal retail pharmacy.
There is an industry shift favoring mail-order prescription and online pharmacy. Ultimately, it's changing the landscapes for traditional operators like Walgreens and CVS Health.
Under Amazon's gargantuan infrastructure and improved logistics, PillPack will enjoy aggressive business growth. Moreover, it'll launch Amazon's online pharmacy as the initial step for more market domination.
In conveniently offering various medicines in a package, PillPack reduces the complexity of taking drug combination and thereby improves patient convenience.
The theme of investing in logistics providers to capitalize on the growth of another related industry is quite intriguing. This strategy leads to highly profitable returns.
The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective. - Warren Buffett
In supplementing my daily research, I periodically feature other articles in various series for members of Integrated BioSci Investing. My goal is to provide members with additional coverage to synergize my usual in-depth research. In the past, I experimented with the excessive emphasis on series articles. And, I learned that it reduced the quality of Integrated BioSci Investing's usual research. With more wisdom, I'll ensure that these brief analysis solely serve to "enhance" rather than "replace" my core value to our private investment community. Through my work, I seek to empower you in making prudent investment decisions and becoming better investors.
Figure 1: Amazon chart (Source: StockCharts)
Though I focus on therapeutic innovation, it's also important for me to assess related business (i.e. retail pharmacy). After all, how innovated drugs are utilized down the vertical chain influences the profitability of bioscience stocks. That being said, I'm intrigued by the recent Amazon (AMZN) acquisition of PillPack. The aforementioned merger and acquisition (M&A) came to my awareness through IBI community discussion.
A notable IBI member shared with the community an article from Christina Farr of CNBC. In my opinion, Farr did a fine coverage of the inside story regarding the Amazon acquisition of PillPack. Instead of solely reading the news, I believe that it's important for you to analyze the information and place them within their appropriate context. In my learning process, I created a "mental framework of data" to make more accurate investment decisions.
My biological analysis machinery is upgraded every time I read up on news and trial results. Consequently, it continually fine-tunes my analytical forecast of clinical trial results and regulatory approvals. And, I want to teach you how to conduct your own analysis rather than simply listening to my recommendation. It's much rewarding to instruct a man how to fish rather than providing him the fish alone.
Shifting gear to the story that Far covered, I'm most impressed with the statement made by the early investor of PillPack (Fred Destin). The Founder of Stride.VC. Destin was enthused about the meeting at the PillPack CEO (TJ Parker)'s with the Amazon executive (Nader Kabbani). In Farr's article, Destin stated, "It didn't feel like a commercial transaction. It felt like a family barbecue and that touched me. It reminded me that it's about people having faith in other people and taking risks on their behalf."
In bioscience investment, it's important to have confidence in the company's leadership. To develop that trust, I usually research a management's track record of performance and/or briefly inquiry them through an informal conversation. For other industries, the management isn't a big deal: you can make substantial profits investing in a company with mediocre management so long as the business model is sound.
It seems that Amazon's management (Kabbani and Jeff Bezos) must have conducted extensive due diligence to spot out Parker. In my view, Parker's fearless attitude in going against giant retailers like Walgreens (WG) and CVS Health Corp (CVS) is a strong testament to his leadership skills and vision. Perhaps, Bezos is drawn to that vision, as it can help him to dominate the pharmacy retail market.
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Dr. Tran's analyses are the best in the biotech sphere, well worth the price of subscription.
Very professional, extremely knowledgeable and very honest … I would highly recommend this service and his stock picks have been very profitable.
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Monday, March 18, 2019

IBI Announcement: Raising Support For An Innovative Fund

Summary
IBI is raising donation to launch an innovation fund via GoFundMe.
The fund will invests in bioscience companies to assist innovators in delivering lifesaving medicines to patients.
Your contribution even if small will be instrumental to the fund's success.
Someone is sitting in the shade today because someone else planted a tree long ago - Warren Buffett
As my readers and friends, you most likely know that my dream is to launch a life science hedge fund. The fund's objective is to invest in stellar public and private bioscience companies. That way, I can assist innovators in bringing lifesaving medicines to patients who can be you and your loved ones. As I recently lost my father-in-law to cancer, I'm fully cognizant of the need for lifesaving drugs.
My promise to you is that your donation will not be wasted. My expertise and unique insight in the bioscience space enabled me to choose investments that will deliver the most value. And, I will unlock the value in the fund's investments through activist investing as the fund grows.
As I research the vast therapeutic areas - immuno-oncology, liver disease, orphan disease, Duchenne muscular dystrophy, obesity, etc - perhaps one day my efforts will translate into better medicines for you and your family.
You might not believe your efforts will count. And yet, the sum is far greater than any individual part when we all contribute. I need your support because I am a young father to a beautiful newborn daughter. Therefore, my financial resources are limited.
With your donation, I'll reach my goal far sooner than I could on my own. Let's us help one another for the good karma will come back to help ourselves. You can access my GoFundMe by CLICKING HERE.

Wednesday, January 30, 2019

Market Outlook: Strategies To Conquer A Bear Market

Summary
A bear market can be your worst enemy or your best friend.
There are three approaches that you can employ to potentially capture enormous profit in this down market.
Which strategies you should take is strongly dependent on your own financial situation and temperament.
For indeed, the investor’s chief problem – and even his worst enemy – is likely to be himself. - Benjamin Graham
Most investors are highly enthusiastic when their stocks appreciate: nearly all investors can relate to that “warm feeling” when their portfolio lit up green during a bull market. Nevertheless, one has to conquer the bears in the middle a downturn in order to capture the profits of the subsequent bull market. In the thick of the recent downturn, the highly powerful human emotion that is fear exerts its detrimental effects. As investors do not easily forget the pain associated with blood spilling on Wall Street, fear usually induces investors to make impulsive decisions. That being said, we’d like to introduce the new Market Outlook series to help you navigate this time of uncertainty and high volatility.
As shown in Figure 1, all major market indices - NASDAQ Biotechnology Index (NASDAQ:NBI), SPDR S&P Biotech (NYSE:XBI), and Dow Jones Industrial Average (NYSE:DJI) - are trading on a downtrend. Back in 2018, we forecasted that the bear market will grow stronger in 2019. Interestingly, the bears came out of the woodwork after a brief rally in January this year. Except for a few trend breakers, most of the bioscience equities gave up a significant percentage of their recent gains. In our view, it’s quite likely that an overall negative sentiment has recently seized the market.
Figure 1: Macromarket analytics (Source: Yahoo finance)
Amid the aforesaid pessimism, there are three strategies for investors to leverage. First, you sell all your shares now to repurchase later at a potentially lower valuation. Second, you continue to hold your stocks as part of the passive investment approach. Third, you concurrently keep your shares while purchasing additional stakes in your favorite equities. Whether you make big bucks on any one of the three approaches depend on your own temperament, situation, level of research, and a bit of luck. Yes, we said it, luck! Regardless of whether you admit it, there is an element of luck when it comes to investing.

... the complete article is available at Integrated BioSci Investing

Housekeeping

Thanks for reading! To get the latest articles, please hit the orange “Follow” button on top.
Be sure to check out our private investment research community, Integrated BioSci Investing.
Dr. Tran's analyses are the best in the biotech sphere, well worth the price of subscription.
Very professional, extremely knowledgeable and very honest … I would highly recommend this service and his stock picks have been very profitable.
Simply put, this is worth every penny. Just earlier today, one of the companies recommended by Dr. Tran got acquired for a nice 50% premium.
Click here for a FREE TRIAL.
Disclaimer: As a medical doctor/market expert, Dr. Tran is not a registered investment advisor. Despite that we strive to provide the most accurate information, we neither guarantee the accuracy nor timeliness. Past performance does NOT guarantee future results. We reserve the right to make any investment decision for ourselves and our affiliates pertaining to any security without notification except where it is required by law. We are also NOT responsible for the action of our affiliates. The thesis that we presented may change anytime due to the changing nature of information itself. Investing in stocks and options can result in a loss of capital. The information presented should NOT be construed as recommendations to buy or sell any form of security. Our articles are best utilized as educational and informational materials to assist investors in your own due diligence process. That said, you are expected to perform your own due diligence and take responsibility for your action. You should also consult with your own financial advisor for specific guidance, as financial circumstance are individualized.

Sunday, January 27, 2019

BioLife Solutions: An IBI Notable Community Discussion On January 25, 2019

Summary
Our Notable Community Discussion helped uncovered another potential big winner, BioLife Solutions.
BioLife Solution is a logistics provider for CAR-T and cell-based therapy innovation.
As CAR-T grows increasingly prominent, we expect that BioLife to enjoy much more robust profits.
Statement from the FDA is a good sign that the company, as well as other CAR-T innovators, will enjoy the upcoming industry tailwinds.
We appreciate the intelligence from bdymnsould and especially Stockfan1 that helped us learned about this company. We wish to share this discussion with all members.
Someone’s sitting in the shade today because someone planted a tree a long time ago. - Warren Buffett
We’d like to continue the weekend coverage with another Notable Community Discussion (“NCD”) article. The initial NCD article was on ResMed. As we stated in that article, the objective of this publication series is to provide additional context to the ongoing community discussion as well as to provide coverage for members who are unable to attend our daily discussion. In this piece, we’d like to present the market intelligence relating to BioLife Solution(NASDAQ:BLFS).
Figure 1: BioLife stock chart (Source: StockCharts)

About The Company

Based in Bothell Washington, BioLife Solution is an industry leader that focuses on the development and commercialization of logistics to service the innovators of cell and gene-based therapy like CAR-T. The company is powering by the proprietary hypothermic storage and cryopreservation freeze media. These biotechnologies maintain live cellular specimen in an environment that are protected by cold temperature and other excellent preservation materials.
Specifically, the HypoThermosol and CryoStor platforms are invaluable tools that has application in regenerative medicine, biobanking, and drug discovery. The biopreservation media is differentiated because it is pure and free from potential contaminants like proteins. The enhanced purity prevents samples from potential damage while improving their self-life and survivability. All that mentioned, we’ll dive into the insight shared by the financial guru and professor, bdymnsoul.
Bdymnsoul: BioLife is an interesting company you may want to take a look at. The customers use “BioLife's CryoStor cell freeze media and HypoThermosol cell storage and shipping media to preserve starting and source material such as apheresis collections and tumor biopsies, as well as for manufactured cell and gene therapies.”
Back on Jan. 22, 2018, Biolife issued a press release stating that the company would benefit from a recent statement made by the US FDA. Responding to a growing wave of cell and gene-based therapy innovation, the FDA is showing its encouragement and support. As follow, the agency made the following projections:
Based on a surge of cell and gene therapy products entering early development, we anticipate that by 2020 we will be receiving more than 200 INDs per year, building upon our total of more than 800 active cell-based or directly administered gene therapy INDs currently on file with the FDA …by 2025, we predict that the FDA will be approving 10 to 20 cell and gene therapy products a year based on an assessment of the current pipeline and the clinical success rates of these products.
As one of IBI’s community key opinion leader, we value bydmnsoul’s perspective and market intelligence. The Ph.D. in finance and professor shared with the IBI community, CEO Mike Rice’s comment pertaining to the FDA,
We welcome this supportive statement from the FDA regarding new policies to advance development of safe and effective cell and gene therapies. To date, we believe our optimized CryoStor and HypoThermosol proprietary biopreservation media products have been used in more than 300 customer clinical applications. The new FDA guidance could help accelerate adoption of our products specifically with later-phase companies that still use non-optimized, generic 'home-brew' preservation media cocktails. We see the potential to convert these trial sponsors to our products.
Bdymnsoul: The FDA statement which Mr. Rice refers, relates to the FDA beefing up staffing in the cell and gene therapy area.
As a prominent key opinion leader, Stockfan1 usually likes to shares perspective from other analysts. From his generosity, Stockfan1 has contributed many excellent stock tips to the community. His insight and market intelligence is stellar in our view.
Stockfan1: I like BioLife. Partnership with SAVSU is a plus. Look at their list of customers.
Figure 2: Customers using BioLife technology (Source: BioLife Investor Presentation)
Interestingly, the Maxim Group analyst (Jason McCarthy) recently raised the price target (“PT”) on BioLife from $18.00 to $26.00. And, Stockfan1 mentioned a quote from the Street Insider article re Mr. McCarthy’s assertion,
Stockfan1: “Maxim valuation continues to rise, in line with our thesis that Biolife is the tangential play to a rapidly growing cell therapy space. Important in our view is that once an efficacious cell therapy, even at the preclinical stage, is using a particular media (i.e. Biolife's) and is progressing, the last thing one wants to do is change to a new media. As such, BioLife becomes "sticky" to that cell therapy, from preclinical to commercial, which is what should drive long-term growth.”
Stockfan1: Perceptive Advisors added 29K shares!
Founded in 1999 by Joseph Edelman, Perceptive Advisors is a hedge fund based in New York City, New York. The fund is leveraging the investing prowess of the Chief Investment Officer, Adam Stone. With an excellent track record, Perceptive has grown its asset under management to the gargantuan $4.3B.
The fact that Perceptive is taking an interest in BioLife signifies that BioLife is worth further consideration by bioscience investors. After all, one of the best funds in this business like what they saw. It’s also important for investors to note that Perceptive invested in 143 companies. Therefore, it could simply mean that BioLife is one of the many stocks diversifications.
Stockfan1: I spoke to Roderick de Greef by email in September and BioLife may choose to exercise its option on SAVSU and he believes it will be accretive.
Dr. Tran: To put things into proper perspective, Roderick de Greef is the Chief Financial Officer (“CFO”) of BioLife. Thanks for sharing the excellent info with the community. If you can give more context on Savsu that’ll be great.
We believe that it is a good sign BioLife is investor friendly and transparent. A friendly and transparent management signifies leadership that works for the benefits of shareholders. And, having an excellent management is one of the requisites to a successful bioscience investment. We noted in an IBI Educational Series article,
In other lines of business, a mediocre management can still deliver value to the company. Those businesses are more straightforward and have easy operations. In contrast, bioscience investment is another beast. It requires “the cream of the crops” management to be successful. To this date, we have yet to witness a company (even with good medicines) performed satisfactorily in the long haul when the management is subpar.
Stockfan1: (Shared links to the latest investor presentation)
Dr. Tran: To make sure I don't let my personal bias prevents me from learning about great companies, I went through the presentation that you shared and noticed that SAVSU provides the technology to protect the biological specimen in a temperature controlled environment for their shipping. In my view, the company’s business operations are similar to those of CryoPort(NASDAQ:CYRX) ...
Back on Sep. 05, 2018, BioLife disclosed that the company invested $5M to increase its stakes in SAVSU from 31% to 44%. SAVSU will employ the capital to scale up its operations and inventory. This is to support the strong demand for its “evo Dry Vapor Shippers” and other technologies.
As a 7-year old company, SAVSU Technologies is headquartered in Albuquerque New Mexico. The firm builds hardware and softwares to protect live cell therapies in their transport and storage. Some clients using SAVSU include other gene therapy innovators, specialty couriers, research institution, and government.
That being said, we believe the increased ownership in SAVSU, a company that is riding on the wave of cell-based therapy (i.e. CAR-T), is quite prudent. And, it can potentially pay off big in the coming years.
Figure 3: Evo smart shippers (Source: SAVSU)
In September 2018 SAVSU announcement, BioLife also disclosed that it has an 18-month option to purchase the remaining 56% in SAVSU for $23M which is payable in the form of common stocks. If the acquisition will occur, we believe that it’ll substantially improve the prospects for BioLife. We applaud Stockfan1 for going the distance in using Philip Fisher’s scuttlebutt method to ask the company for further insight. The views from the CEO (Mike Rice) also support an upcoming SAVSU complete acquisition.
This additional investment in SAVSU supports our previously announced growth strategy to invest in companies and technologies that also supply the cell and gene therapy industry with innovative, highly valued solutions. We believe SAVSU is at an inflection point in product adoption in the cell and gene therapy market. The purchase option provides BioLife with complete flexibility with regard to a full acquisition of SAVSU, while setting a value today. Our decision to exercise the purchase option will be based on SAVSU’s continued revenue growth, and determining the optimal time to consolidate SAVSU and BioLife's financial results.

Potential Risks

As with any investment, there are pertinent risks risk that investors should be aware of. At this stage in its growth cycle, we believe that BioLife might grow too aggressively and thus encounters a potential cash flow constraint. Therefore, investors need to carefully monitor the OpEx versus the cash position to gauge any potential funding issues. The other risk is the strong competition from the other operators in the space like CryoPort. As the rule of thumb, increasing competition will translate into lower profit margins for all players.

Final Remarks

In all, we appreciate the market intelligence from bdymnsoul and Stockfan1 that helped us overcome our personal bias. The community discussion enabled us to see beyond our blind spot, as we seek to uncover potential big winners. While we will conduct further due diligence on the company, we encourage investors to take a serious look at BioLife. As a firm that is riding on the wave of medical innovation in CAR-T and other cell-based therapies, BioLife is most likely to bank in greater profits as CAR-T gains increasing prominence. Due to its stellar efficacy and safety, we believe that many good days are ahead for CAR-T and BioLife.
We’re honored that you visited us today. Founded by Dr. Hung Tran, MD, MS, CNPR, IBI is uncovering big winners like KITE, JUNO, and CORI that got acquired. While uninformed investors fear a bear market, we’re seizing this opportunity. Our secret sauce is extreme due diligence with expert data analysis. The service features daily research/consulting. Though we publish some ideas publicly, those articles are available in advance and are discussed extensively in IBI. We also reserve our best ideas exclusively for members. And, we invite you to subscribe now to lock in the current price.