Top Ten Events for Healthcare Investors in 2016

As the end of the year draws near, we pause to reflect on major events impacting the healthcare sector and its investors… in 2016 and going forward. Our top ten, in no particular order:

Epipen—Perhaps the biggest splash of the year was when Mylan labs raised the price of their epinephrine injector pen (EPI PEN) for those with life-threatening allergies. Their missteps landed them in the middle of several congressional investigations and they were lynched in the press. The $472 million dollar settlement for misrepresenting with Medicare was further salt in the wound for investors who saw the stock price plunge.

Theranos—Had Theranos been a public company, we might not be having this discussion…but Stanford wunderkind Elizabeth Holmes claimed to have revolutionized blood testing for the masses. Her company, Theranos, turned out to be fraudulent. She is in trouble with everyone. Her mega-unicorn valuation was $9.5 billion dollars. It’s currently zero as she is banned from the lab. Her star-studded board had powerful political and business figures like Henry Kissinger…but NO SCIENTISTS. That has finally changed. Can they recover? If they do you will hear about it at In Sickness and Wealth. We called Theranos’ fall from grace long before it hit the press, and if they are resurrected, Jodie will be covering it here.

Prop 61—Going into October, this initiative, which would have held prices paid by Californians to Veterans Administration levels (a significant discount to what they currently pay), was sure to pass. The polls showed Californians wanted drug prices brought under some control. Somehow, someway, the most liberal state in the country, managed to reject the proposition. This initiative brought out the big guns with big pharma spending heavily.

The Immuno-Oncology Race—Merck eclipsing Bristol Myers Squibb in the PD-1 Inhibitor race for additional cancer indications. Bristol had this race won 18 months ago. Then in a stunning reversal, BMS’ Opdivo failed in a late-stage cancer trial and Merck’s Keytruda showed great data. In an instant, Bristol Myers stock went from the 70s to the 50s. Oops. Merck’s rallied to a multi-year high. The race will get more competitive in 2017 as other companies come out with new immuno-oncology drugs.

And then there were two—For years, Medtronic, Edwards Lifesciences and St Jude ruled the cardiac device space. But in April, Abbott’s $30.6 billion buyout of St Jude Medical changed the trilogy. This should prove interesting.

Patent War over CRISPR—Harvard/MIT’s Broad Institute gets in the judicial ring with the University of California at Berkeley. The hearing is set for early December. At stake: billions in licensing rights for CRISPR patents. Right now Broad has these patents, but U of California is claiming interference. The stocks represented—EDITAS and Intellia—feature two of the brightest minds in Molecular Biology, Feng Zhang and Jennifer Doudna.

Shire’s $32 billion BAXALTA purchase—Perhaps the biggest healthcare buyout of the year (so far at least). Look for more M&A activity as drug development costs skyrocket. It’s sometimes easier to buy a blockbuster than to grow one internally.

Eli Lilly—After spending years and millions on potential treatments for Alzheimer’s, Lilly raised the white flag on their efforts and are re-evaluating their portfolio of drugs. With Alzheimer’s expected to cost $250 billion a year now, hopefully someone breaks this disease before it breaks Medicare.

Quintiles buying IMS Health for a $12.8 billion price tag—The health information and research companies combined forces recently. IMS was once a great company and then went private…then went public again…and then was bought. In Sickness and Wealth will be digging deeper to provide insights on this company with great potential in healthcare regardless what happens to Obamacare.

Trump—Whether or not he will make this nation great again is subject to opinion. But in one of the most shocking political upsets of all time—despite little campaign spending, all the negative press and going against an incumbent party—Trump is now President-elect Trump. Only in America.

Enjoy the Christmas Holidays…and give the gift that keeps on giving…an annual subscription to In Sickness and Wealth. At just $149.00, it beats a gift card, a pair of socks, AND your aunt’s fruitcake!

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