Stockwinners Portfolio returns 22.8% in 2022

S&P 500 declined 19.6% during the same period

The bear market of 2022 cost most investors dearly whereas Stockwinners readers were able to register double digit returns. Our experience in the past 24 years has taught us how to avoid pitfall of following crowds and Wall Street gurus. In fact, we stayed away from story stocks such Tesla (TSLA), Paypal Holdings (PYPL) and Meta Platform (META). We concentrated on small to medium cap stocks. These stocks typically do not have any exposure to overseas markets and are traded on their own fundamentals.

Russian invasion of Ukraine created unique trading opportunities for investors. The vicious invasion of Ukraine caused energy and commodity prices skyrocket thus offering opportunities in that space. In fact, one of our better performers on the year was EPAM System (EPAM). This software company has about 25 percent of its workforce located in the eastern European country. Those who bought the stock based on our recommendations were rewarded with a 23% return in two days.

Energy stocks were awakened with the invasion. Crude oil shot up to $106.50 from $70 per barrel. This price increase buoyed energy stocks. Amongst our better performers were shares of Par Pacific Holdings (PARR). The refiner shares gained fifteen percent following our recommendations.

Other commodity stocks that were featured in our portfolio included those involved in precious and rare minerals mining. Livent Corporation (LTHM) was one such name. The lithium miner was featured several times with solid returns. The returns were 14%, 12% and 18%. Sigma Lithium Corporation (SGML) was another name in the sector. It gained 14% following our recommendations.

Sierra Wireless, Inc. (SWIR) was another stock that came to our attention. The company provides device-to-cloud Internet of Things (IoT) solutions. Shares were featured in August with success. Stock gained 18 percents in two weeks.

We featured put options (shorting the stock) on several names. One of the names featured was Open Text Corporation (OTEX). Put option on the name returned 325% in 17 days. The put was featured at $1.50 and it was closed 17 days later at $6.40. Another name that was featured several times was Carvana (CVNA). Shares of the used car retailer have fallen from $300 to $3.55.

A strong employment market created opportunity in placement companies. Cross Country Healthcare, Inc. (CCRN) was such name. The company places medical staff. Shares were featured in August and gained 18% in less than two weeks.

Our portfolio can be downloaded here. Additionally, one may download our selections for the past 18 years in a spreadsheet format.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Horizon Therapeutics sold for $28.3 billion

Amgen to acquire Horizon Therapeutics for $116.50 per share in cash

The board of directors of Horizon Therapeutics (HZNP) and the board of directors of Amgen (AMGN) announced that they have reached agreement on the terms of a cash offer for the company by Pillartree, a newly formed private limited company wholly owned by Amgen, which is unanimously recommended by the company board and pursuant to which acquirer sub will acquire the entire issued and to be issued ordinary share capital of the company.

Under the terms of the acquisition, each company shareholder at the Scheme Record Time will be entitled to receive: $116.50 for each Company Share in cash.

The acquisition represents: a premium of approximately 47.9% to the closing price of $78.76 per company share on November 29 and a premium of approximately 19.7% to the closing price of $97.29 per company share on December 9.

The acquisition values the entire issued and to be issued ordinary share capital of the company at approximately $27.8B on a fully diluted basis and implies an enterprise value of approximately $28.3B.

Amgen has entered into a Bridge Credit Agreement, dated December 12, for an aggregate amount of $28.5B.

Having taken into account the relevant factors and applicable risks, the company board, which has been so advised by Morgan Stanley, which as financial advisor to the company board has rendered a fairness opinion, considers the terms of the acquisition as set out in this announcement to be fair and reasonable.

In providing its advice to the company board, Morgan Stanley has taken into account the commercial assessments of the company directors.

The company board has unanimously determined that the transaction agreement and the transactions, including the scheme, are advisable for, fair to and in the best interests of, the company shareholders.

Accordingly, the company board unanimously recommends that company shareholders vote in favor of the scheme meeting resolution and the Required EGM Resolutions, or, if the acquisition is implemented by a takeover offer, accept or procure acceptance of such takeover offer.

It is agreed that the acquisition will be implemented by way of an Irish High Court-sanctioned scheme of arrangement under Chapter 1 of Part 9 of the Irish Companies Act.

The acquisition will be subject to the satisfaction or waiver of the conditions, which are set out in full in Appendix 3 to this announcement, including, in summary: the requisite approval by company shareholders of the scheme meeting resolution and the required EGM Resolutions; the sanction of the scheme by the Irish High Court and the receipt of required antitrust clearances in the United States, Austria and Germany and the receipt of required foreign investment clearances in France, Germany, Denmark and Italy.

It is expected that the scheme document, containing further information about the acquisition and notices of the scheme meeting and the EGM, the expected timetable for completion and action to be taken by company shareholders, will be published as soon as practicable.

It is anticipated that the scheme will, subject to obtaining the necessary regulatory approvals, be declared effective in the first half of 2023. An expected timetable of key events relating to the acquisition will be provided in the scheme document.

Horizon Therapeutics Public Limited Company is an Irish biotechnology company, It focuses on the discovery, development, and commercialization of medicines that address critical needs for people impacted by rare, autoimmune, and severe inflammatory diseases. Its portfolio comprises 12 medicines in the areas of rare diseases, gout, ophthalmology, and inflammation.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Eisai reports positive Alzheimer data, shares jump!

Biogen/Eisai’s phase 3 trial of lecanemab in MCI meet primary endpoint

Eisai (ESALY) and Biogen (BIIB) “announced positive topline results from Eisai’s large global Phase 3 confirmatory Clarity AD clinical trial of lecanemab, an investigational anti-amyloid beta protofibril antibody for the treatment of mild cognitive impairment due to Alzheimer’s disease, AD, and mild AD with confirmed presence of amyloid pathology in the brain.

#Lecanemab met the primary endpoint and all key secondary endpoints with highly statistically significant results.

#Eisai will discuss this data with regulatory authorities in the U.S., Japan and Europe with the aim to file for traditional approval in the US and for marketing authorization applications in Japan and Europe by the end of Eisai’s FY2022, which ends March 31, 2023.

Amyloid-related imaging abnormalities

Additionally, Eisai will present the Clarity AD study results on November 29, 2022, at the Clinical Trials on Alzheimer’s Congress, and publish the findings in a peer-reviewed medical journal. Lecanemab treatment met the primary endpoint and reduced clinical decline on the global cognitive and functional scale, CDR-SB, compared with placebo at 18 months by 27%, which represents a treatment difference in the score change of -0.45 in the analysis of Intent-to-treat population.

Starting as early as six months, across all time points, the treatment showed highly statistically significant changes in CDR-SB from baseline compared to placebo.

All key secondary endpoints were also met with highly statistically significant results compared with placebo.

Key secondary endpoints were the change from baseline at 18 months compared with placebo of treatment in amyloid levels in the brain measured by amyloid positron emission tomography, the AD Assessment Scale-cognitive subscale14, AD Composite Score and the AD Cooperative Study-Activities of Daily Living Scale for Mild Cognitive Impairment.”

ESALY last traded at $39.79. BIIB last traded at $197.50.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

FDA Approves Biogen’s Alzheimer’s Drug

FDA approves Biogen Alzheimer’s drug, says benefits outweigh risks

The FDA approved Biogen’s (BIIB) Aduhelm to treat patients with Alzheimer’s disease.

“This approval is significant in many ways. Aduhelm is the first novel therapy approved for Alzheimer’s disease since 2003.

Perhaps more significantly, Aduhelm is the first treatment directed at the underlying pathophysiology of Alzheimer’s disease, the presence of amyloid beta plaques in the brain.

The clinical trials for Aduhelm were the first to show that a reduction in these plaques – a hallmark finding in the brain of patients with Alzheimer’s – is expected to lead to a reduction in the clinical decline of this devastating form of dementia,” the FDA said in a statement.

Eli Lilly announces Alimta label expanded by FDA, Stockwinners
Eli Lilly is a partner with Biogen

It added, “We ultimately decided to use the Accelerated Approval pathway – a pathway intended to provide earlier access to potentially valuable therapies for patients with serious diseases where there is an unmet need, and where there is an expectation of clinical benefit despite some residual uncertainty regarding that benefit.

Brain of an Alzheimer patient

In determining that the application met the requirements for Accelerated Approval, the Agency concluded that the benefits of Aduhelm for patients with Alzheimer’s disease outweighed the risks of the therapy.”

The FDA said in its approval statement: “Additionally, FDA is requiring Biogen to conduct a post-approval clinical trial to verify the drug’s clinical benefit. If the drug does not work as intended, we can take steps to remove it from the market. But hopefully, we will see further evidence of benefit in the clinical trial and as greater numbers of people receive Aduhelm. As an agency, we will also continue to work to foster drug development for this catastrophic disease.”

STIFEL

Stifel analyst Paul Matteis reiterates his Buy rating on Biogen shares following the FDA granting accelerated approval of aducanumab, now to be called “Aduhelm,” for the treatment of Alzheimer’s disease.

Approval based on amyloid plaque as a “surrogate” is “definitely unexpected” and appears to be a way for FDA to work around the contentious advisory committee meeting, argues Matteis, who adds that the approval “is a big win.” How investors will risk-adjust revenues that are modeled after completion of a Phase 4 trial and how insurers will treat access for a drug approved based on a biomarker are “highly interesting” questions that will now “be debated at a materially higher stock valuation,” added Matteis. Biogen shares remain halted for trading at midday following news of the FDA approval.

JEFFRIES

Jefferies analyst Andrew Tsai said news of Biogen (BIIB) being granted FDA approval for aducanumab is likely to spark investor enthusiasm across all Alzheimer’s names and he believes the longer-term setup for Athira Pharma (ATHA) looks more attractive now. Given what he views as “the FDA tailwind,” he would buy on strength as he believes the FDA’s aducanumab decision “clearly has a positive readthrough” to Athira, whose Phase I data suggests ATHA-1017 could produce “a profound cognitive benefit” in Phase 2/3 studies expected to read out in 2022, Tsai tells investors.

In that context, he thinks a 25%-50% short-term move for Athira shares “seems reasonable” relative to the company’s current market cap.

Shares of Biogen (BIIB) remain halted while Eli Lilly (LLY), who has an Alzheimer’s disease drug in its pipeline, is up 4% to $210.78 following the news.

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