Pharma, Tech And Finance

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Both Astra-Zeneca and Novartis today published news of important new drugs to treat breast cancers. The AZN drug Enhertu cut the risk of death or tumor growth by 72% in metastatic breast cancer compared to the current standard treatment, Roche's Kadycla, in a phase III trial for 500 women whose tumors produced high levels of HER-2 and whose cancers did not respond to earlier treatment. "We've never seen a magnitude of benefit like this in metastatic breast cancer before," said Dave Fredrickson, AZN's head of oncology. AZN rose 4%.

Novartis (NYSE: NVS) today announced results of the final overall survival analysis of the Phase III MONALEESA-2 study, which evaluated its Kisqali® (ribociclib) combined with letrozole vs placebo plus letrozole in postmenopausal women with hormone receptor-positive, human epidermal growth factor receptor 2-negative (HR+/HER2-) advanced or metastatic breast cancer with no prior systemic treatment for advanced disease. These data were presented as a late-breaker oral presentation at the European Society for Medical Oncology Congress 2021 on Sunday. Kisqali in combination with letrozole met its key secondary endpointm demonstrating a statistically significant and clinically meaningful improvement in survival (median 63.9 vs. 51.4 months; HR=0.76; 95% CI: 0.63-0.93; p=0.004)2. The analysis found that after a median follow-up of over six and a half years, the longest for any CDK4/6 inhibitor trial to date, the improvement in the median OS was over one year. MONALEESA-2 showed that after five years, patients treated with Kisqali in combination with letrozole had more than a 50% chance of survival (52.3% vs. 43.9%; 95% confidence index: 46.5-57.7 vs. 38.3-49.4). "These remarkable overall survival data are highly encouraging and represent the longest reported median survival from a randomized trial in HR+/HER2- advanced breast cancer. This extension of life is great news for our patients and the building block for further progress," said Gabriel N. Hortobagyi, MD, FACP, professor at U Texas MD Anderson Cancer Center.

Interestingly enough, NVS was called a sell, by Deutsche Bank over the weekend, down from hold. Lucentis's macular degeneration eye drug now faces challenges from Teva, which won an FDA approval, and Roche which filed for one. TEVA fell despite this because of problems with Avtech's drug.

Aurinia Pharma of British Columbia is up on news about its lupus drug. AUPH was picked by Martin Ferrera.

Meanwhile, Glaxo Smith Kline (GSK) was accused in the Financial Times Saturday of causing huge carbon emissions with its inhalers to treat respiratory problems. The writer notes that dry powder propellants (such as have been used to treat covid-19) could help cut the carbon.

According to Barron's this weekend, three drug majors, Merck (MRK), Pfizer (PFE), and Roche, are racing to produce an oral covid-19 treatment soon which people can use without hospitalization. Roche's “convenient” drug is being developed by small-cap Atea Pharma, AVIR, whose stock has crashed 38% YTD. RHHBY has global distribution rights but Silicon Valley Bank analyst Roanna Ruiz has put a $60 target price on AVIR which last week closed at $25.98. The bank also writes up Merck's find, so this is not its only tip. Merck held an investor day on cancer drugs today

Good news on some drugs was not enough to boost stock markets however after a fear of inflation and the relentless rise in new cases of Covid-19 in its Delta variant spooked markets. Another factor hurting Wall Street is that the Chinese Evergrande real estate developer's likely bankruptcy has upped the value of the buck. This tore into the energy sector, a key US export industry, because oil and gas are priced in dollars foreign countries will have to find. Oil maven Daniel Yergin, interviewed by Barron's, claimed that China dominates supply chains for lithium (for ion batteries) and rare earths. For the record, despite my global mandate, I have found small and growing North American firms able to supply the needs for these new energy products.

Financials also tottered, notably UBS of Switzerland. My State Street Bank (STT) shares were up a bit as it will not be buying Invesco as reported last week. Another US winner, Thermo Fisher Scientific (TMO), while down, is still up hugely.

Tech is dreck but Microsoft (MSFT) is the least dumped of the big 5, perhaps because it raised its divvy. Today we had results from China's 10 Cent which were mixed after new regulations nipped its market share and increased its costs. But China is so yesterday.

The Dow Jones lost 720 points at the opening and is still down 650 points, tracked by Q and the S&P, with a little good showing by our stocks. Barron's believes we are all going to cheer new higher dividends in the near term, which will only be true when comparing stocks to (yech) bonds. My own broker, TD Ameritrade, now consolidating with its parent Schwab, has made it almost impossible to log on to accounts, allegedly for security, but I think to stop people moving because it is charging more for purchases of exchange-traded funds, not from its own stable.

Gold, which is priced in dollars, has risen, boosting also our Kirkland Lake (KL) mining stock.

Other winners include US telcos, Grifols (GRFS).

A Spanish blood-testing firm, and SPDR TIPS an ETF.

The big question is are we in a short-term modest correction or is there a big negative wave coming? If I knew the answer I would not be bothering to write a blog. My colleague Joe Shaefer says to “start nibbling” at stocks you like. I am less optimistic.

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