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Novartis AG Message Board

flatlander_60048 19 posts  |  Last Activity: Oct 21, 2014 6:06 PM Member since: Jul 8, 2000
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  • Reply to

    Zacks upgraded GHDX Rank #1 (Strong Buy).

    by terry_amln Oct 21, 2014 2:33 PM
    flatlander_60048 flatlander_60048 Oct 21, 2014 6:06 PM Flag

    I'm also not a big fan of Zack's. To me the most interesting thing about GHDX is that they are posting pretty strong growth in Europe while the EU is mired in a deflationary recession. GHDX is moving up without much change in volume. A good quarter could light a fire under the stock since there is very little available float. Similarly, Medicare reimbursement coding for the prostate test would be a huge development. While someone out there did not like the Exact Science post, it does however demonstrate two points:

    1) Medicare is not afraid to pay up and reimburse at higher than anticipated rates for tests that ultimately save overall health care costs; and

    2)These approvals can act as a launch pad for nice upward moves in share price.

    FL

  • I got interested in CGM Focus since it had the ability to go long or short. Unfortunately Heebner appears to be a perma-bull. With QE being phased out, global deflationary evidence, very high CAPE valuations and the threat of Ebola, one would have thought he would have established a few more shot positions (beside the long bond). The last two times QE ended the market reacted similarly, so it does not take much of a crystal ball to figure out that this was a good time to go short. Fortunately I've done so by buying TWM in some of my brokerage accounts. Does anyone know if Hebner has ever used the short position effectively??

    FL

  • flatlander_60048 by flatlander_60048 Oct 10, 2014 1:51 PM Flag

    I believe that GHDX is up today because Exact Sciences received a higher than expected Medicare reimbursement rate for their colon cancer test. I think the market is warming up to the idea of genomic testing to reduce health care costs.

    FL

  • flatlander_60048 flatlander_60048 Oct 10, 2014 9:57 AM Flag

    Good thing you got out of that position. Any company that shows strength in this kind of a *&^%&* MARKET IS NOT A GOOD SHORT CANDIDATE. Besides there are too may potential positive catalysts that could turn against you.

    FL

  • Reply to

    Has anyone noticed

    by madmanshooter Oct 2, 2014 9:29 PM
    flatlander_60048 flatlander_60048 Oct 3, 2014 6:40 PM Flag

    I think it has held up for the reasons outlined in my previous post. The market the past couple weeks has been anticipating a deflationary environment. GHDX is precisely the type of stock that can do well in a deflationary environment. Stocks that wring costs out of the system (especially by reducing costs to over leveraged governments of developed countries with aging demographics) will do well.

    Today's job data was good and may throw some cold water on the idea of deflation in the US. Don't think there is much doubt that Japan and Europe are headed down a deflationary slope.

    Another stock I like based on this investment theme is NVS. However it has already run up. I sold 25% of my holdings since I had big gains but would reload if it drops into the 80's. NVS is the #1 biogeneric drug producer in the world. $64B in biologic drugs come off patent the next couple years (including Humira the best selling drug of all time.

    Always appreciate intelligent comments in what is otherwise a complete wasteland.

    FL

  • Reply to

    Crossroads

    by flatlander_60048 Sep 30, 2014 4:15 PM
    flatlander_60048 flatlander_60048 Oct 1, 2014 3:58 PM Flag

    GHDX is trading well thru the small cap carnage going on now. II believe this is a function of four factors:

    1) GHDX did not experience much of any share price run up the past several years.

    2) If we are headed into a deflationary environment (which much of the market seems to be betting on) then companies that wring costs out of high gov expenditure areas such as health care are in a sweet spot.

    3) The PR machine is cranking up in advance of an anticipated reimbursement code for the prostate test. This code will mark a turning point.

    4) The float is small and most shares are held by insiders. trading out of GHDX has risks, since GHDX may be hard to re-enter on any good news.

    FL

  • flatlander_60048 by flatlander_60048 Sep 30, 2014 4:15 PM Flag

    GHDX appears interestingly positioned at the crossroads of a graying demographic that will need more cancer related services especially with regards to making informed decisions. On the other side are the reluctant payers who will be required to get as much bang for the buck (or Euro) as possible. The fact of the matter is the debt laden developed countries will have no choice but to try to be more efficient in health care spending. Europe seems to be crossing this bridge before the US as indicated by NICE putting the clamps on spending in the UK.

    My biggest question is whether OncoDX prostate test is better then other tests (similar to the Onco DX Breast Cancer tests)? The GHDX partners (Cleveland Clinic, UC San Fran, CPDR) are appear strong and GHDX emphasizes the advantages such as not as susceptible to heterogeneity issues, . The PR department seems to be cranking up the presses lately. Hopefully this is the precursor to reimbursement approvals.

    FL

  • flatlander_60048 by flatlander_60048 Sep 24, 2014 10:03 AM Flag

    GHDX tends to put out a few fluff news releases. However, enlisting Joe Torre to put a face on prostate cancer is likely to be very helpful. The battle to up the awareness of genomic testing's role in treating this disease will benefit from having a spokesman that garners name recognition from most men. Referral/testimonial/personal accounts tend to be some of the strongest educational and sales tactics.

    FL

  • Reply to

    Time for a Little Science and Common Sense

    by optsyeagle Sep 22, 2014 4:07 PM
    flatlander_60048 flatlander_60048 Sep 23, 2014 9:50 PM Flag

    Guess I do not understand SBS either. Seems like the unit pricing of water should increase in order to drive SBS to develop alternate sources such as groundwater, pipelines from more distal supply areas, etc. They seem to be totally focused on the demand side by offering price cuts for reduced usage. Even if the rain begins falling again the money spent developing alt water sources is a good investment in the future.

    FL

  • flatlander_60048 by flatlander_60048 Sep 18, 2014 11:42 AM Flag

    When Science Outpaces Payers: Molecular Diagnostics Pose Reimbursement Dilemmas

    http://www.onclive.com/publications/oncology-live/2014/august-2014/when-science-outpaces-payers-molecular-diagnostics-pose-reimbursement-dilemmas/1#sthash.WIe0o5QT.dpuf

    Quote:Many see the industry at a crossroads, with reimbursement issues at the center. The future of molecular diagnostics is both entwined in the broader discussion of paying America’s healthcare tab and constitutes its own separate beast, for reimbursement issues present a steep scientific and regulatory challenge. Most of the experts who spoke with Evidence-Based Oncology predicted an industry shakeout would occur, with some promising small companies joining large ones while others will disappear.

    Right now, the divide looks like this: Payers have seen a new cost category explode across their balance sheets, and they are determined to understand what they are funding and whether tests are necessary. Molecular diagnostic companies, meanwhile, say they can’t understand what they call a penny-wise, pound-foolish approach. Why, they say, should insurers pay ever-rising sums for cancer therapies, with prices measured in tens and hundreds of thousands of dollars, but balk at a $3000 test2 that would tell doctors whether the drug is likely to work?

    “We overtreat people continuously in this country,” said Macey Johnson, vice president of managed care and reimbursement at bioTheranostics, based in San Diego, California. “It’s overkill to give people all these drugs, with oncology being the poster child.”

    As both regulators and testing companies implement a new reimbursement law, many stakeholders see opportunities for change. “It brings the industry into the bright light,” said Mike Barlow, vice president of operations at Palmetto GBA of South Carolina, the Medicare contractor that developed the MolDx program to create billing expertise around an emerging industry. “Too often, the lab industry has been opera

  • flatlander_60048 flatlander_60048 Sep 18, 2014 9:39 AM Flag

    From what I understand MNTA filed the necessary data in May and does not see this to be an impediment to approval.

  • flatlander_60048 by flatlander_60048 Sep 10, 2014 9:59 AM Flag

    In order to get to GHDX's stated projection of $1B in product sales by 2020, sales growth will have to ramp to over 20% in the next year or so and 25% or so after 2016. As such, this is a very pivotal time for GHDX. A lot of us have been impatient (me included) while the foundation for growth is put in place. I believe that if GHDX is successful in executing this plan, the share price could triple by 2020. If this occurs, the Backer Bros will be in a position to determine whether GHDX goes it alone or whether they are acquired. From what I can see from several of their past holdings, they will not be in a hurry to sell out. This hopefully plays out well for the rest of us small shareholders. Given the relatively limited float, any significant upturn in buying can lead to quick share price appreciation.

    FL

  • flatlander_60048 by flatlander_60048 Sep 8, 2014 5:34 PM Flag

    Went back and revisited my NVS holdings, and decided to trim less than 10% which represents a overweight position. The thing that keeps catching my eye is that NVS is currently #1 in follow on biologics. There are approximately $60B of biologics coming off patent in the next few years and NVS is the single best positioned company to capitalize on this.

    NVS as 6 huge biologics in Phase III testing or registration. These include huge blockbusters including:

    Humira (currently #1 selling Drug) expires in the US in 2016
    Rituxan (already expired in EU, expires in US in 2016)
    Enbrel (expires next year in the EU)
    Neulasta (expires in the US in 2015)

    Throw in Copaxone which could be approved any day and the numbers are staggering. It is apparent that guidance is fairly conservative regarding these products. If quick approval of just a few occurs and few competitors emerge, there will be huge upside.

    There have been notable failures (TEVA canning their Rituxan program), thus it is apparent that the bar is much higher (high costs and technical expertise levels) and the margins will be much higher than typical generic drugs. The worldwide pressure to cut costs on these projects is great. With a worldwide sales force and established specialty areas that allow access to physicians and cost effective marketing, NVS seems to provide a great way to play the graying of the worldwide population. Thus, hanging on to most of my shares makes sense to me.

    FL

  • flatlander_60048 by flatlander_60048 Sep 5, 2014 1:13 PM Flag

    I believe that the Baker Brothers currently own about 45% of GHDX. When NVS bought out a majority stake (more than 50%) in Alcon they had to consolidate Alcon's earnings as a separate line item into their SEC reporting. This continued until they bought out the rest of Nestle's shares and fully consolidated Alcon into the NVS structure. Are hedge funds held to a similar limitation. Are the baker Bros limited to less than 50% of GHDX? In which case, they may be more bullish on it than the 6th position it currently occupies ($ wise) in their portfolio.

    Any thoughts

    FL

  • Reply to

    One hundred dollars on Monday!

    by blackmonday1987 Aug 30, 2014 6:34 PM
    flatlander_60048 flatlander_60048 Sep 1, 2014 12:54 PM Flag

    Happily, I'm wrong. Up 4.3% in Europe today. If NYSE follows suite this should be the largest 1 day increase I remember since I first bought NVS in 2002. Market is ascribing huge blockbuster potential.

    FL

  • Reply to

    One hundred dollars on Monday!

    by blackmonday1987 Aug 30, 2014 6:34 PM
    flatlander_60048 flatlander_60048 Aug 30, 2014 7:13 PM Flag

    I wish that $100 was in the realm of possibility. However, I have been in NVS for more than a decade and don't think I've ever seen it move more than 3% on any news. I've been contemplating when to lighten up some since NVS has grown to be way too large a portion of my portfolio.

    I still like the direction Vasella set them on. If emulation is a sign of flattery, they have definitely set the pace for big pharma. Biogenerics, vision care are some examples of NVS identifying the trend and acting on it before others.

    This definitely comes at a good time as diovan generic competition heats up. I expect that biogeneric news to be a catalyst for the next couple of years.

    Good Luck Longs.

    FL

  • flatlander_60048 by flatlander_60048 Aug 25, 2014 10:26 PM Flag

    With Sunday's earthquake in Napa, I was thinking that GHDX might have some backlash. I think at some point in the near future they will need to look at opening a second lab facility in Europe. The earthquake risk is a major reason, but it will also help with marketing western Europe to show that the company is bringing jobs to the area. Obviously the acceptance of Onco DX breast, and prostate tests with reimbursement codes would be helpful. I'm sure they are waiting for the moment when the test volumes justify such a move. However, risk management may move them a little sooner.

    FL

  • Reply to

    Europe vs US

    by flatlander_60048 Aug 12, 2014 12:52 PM
    flatlander_60048 flatlander_60048 Aug 13, 2014 10:50 AM Flag

    Proton radiation, robotic surgery, hormone treatment, targeted drugs and even the physicians all have a stake in the over treatment of diseases like prostate cancer. On paper, the ACA seeks to switch the payment model to outcomes rather than treatment for treatment sake. I think it will take a while to switch the mindset of the medical community since it will result in shifting of the winner and looser landscape. The lobbyist power is firmly entrenched to maintain the status quo.

    I think the Europeans have come to grips with their limited resources and are taking steps before the US. I hate to admit it but they seem to be a couple of years ahead of the US in healthcare trends. Take biogenerics for example. They have had guidelines in place for biogeneric drug approvals for a couple years whereas we are still struggling with it in the states. Everyone realizes that it is necessary to control costs, but the entrenched interests and lobbyists are too strong for logical legislation to be passed quickly. With national debt pushing $17T we are able to kick this can down the road because borrowing costs are so low. As soon as interest rates kick up, this will no longer be the case. It will become immediately apparent that we as a nation cannot afford to spend 17% of our GDP on health care. Then companies that save money like GHDX will have a tailwind.

    Regards
    FL

  • flatlander_60048 by flatlander_60048 Aug 12, 2014 12:52 PM Flag

    It has become apparent to me, that GHDX will experience better traction in Europe than in the US in the short term. Europe seems to have come to grips with their slow growth dilemma and is trying to trying to squeeze the most out of the GDP which means being more efficient in health care spending. This is the crux of the NICE and recent Spanish recommendations for Onco DX. In the US too much of the Health Care economy is still dependent on overtreating disease. As long as the analysts line up behind an Intuitive Surgical and others, it will be hard to get coverage for a company that is dependent on testing that stands to reduce costs for managing these diseases.

    The key is seems to be approval for the payer reimbursement codes for the prostate test. That is the tipping point for GHDX. Until that time, the build out of the sales force and the scientific research journals will continue to cause cash burn that will hold back the share price. Payers will endorse the test whole heartedly once the codes are approved since the ACA requires cost reduction and more efficient treatment. 2015 Looks Bright to me. However, I suspect that GHDX will be taken out before 2016 when the full measures of success are realized.

    FL

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