Ebola Vaccine and Inhaled Insulin Incoming

Biotech partnerships, an IPO that wasn't, and how big data is fighting Ebola.

Aug 16, 2014 at 6:01AM

In this healthcare-focused of episode of Where The Money Is, analysts David Williamson and Michael Douglass tackle the weeks biggest stories in pharma and biotech, and how the industry is attempting to combat the Ebola Outbreak.

MannKind's big news

It was a jam-packed week for biotech investors. MannKind (NASDAQ:MNKD) unveiled a marketing partner for its recently approved inhaled insulin Afrezza. Big pharma and diabetes powerhouse Sanofi (NYSE:SNY) is as good a partner as investors could have hoped for, but the terms of the deal left a bad taste. Shares of MannKind were up only 5% the day the deal broke and promptly fell 12% the next day on what should have been the last great catalyst for the stock before quarterly sales determine its valuation. And that is part of the problem -- investors may have had unrealistic expectations, as giving away 65% of global Afrezza revenue for less than $1 billion in milestones and upfront cash makes it seem Sanofi got the better deal if the drug turns out to be a blockbuster.

Dendreon's debt problem

Dendreon (NASDAQ:DNDN) stands in contrast to MannKind. It decided to go it alone with prostate cancer vaccine Provenge, and the results have been disastrous for investors. Shares have grinded downwards losing 94% of their value over the last 5 years. Sales have roughly plateaued in the face of tough competition and a looming $620 million debt payment in 2016 hovers over the company's future like the sword of Damocles. Management disclosed that the threads holding that sword in place are fraying, and that current investors may be left with little (dilution) to no (bankruptcy) stake in the biotech going forward. Shares plunged over 33% on management's acknowledgment of the looming threat, but it shouldn't have been a surprise to anyone doing full due diligence on the stock.

Predicting, and fighting, Ebola

The Ebola outbreak in western Africa has captivated and concerned health officials. However, nine days before the World Health Organization declared the emergency, a computer program gobbling up public data warned of a rapidly spreading hemorrhagic fever. Big data may help contain future outbreaks, but preventing them from happening in the first place is the focus of drug developers. Leading the pack is GlaxoSmithKline (NYSE:GSK), marking a brief moment of good news for investors slogging through a tough 2014. Second quarter results were dismal, allegations of massive corruption scandal in China get more bizarre by the day, and concerns remain over Glaxo's marketing practices in a number of other countries as well. With the big pharma is shifting its focus to vaccines, bringing the first for Ebola vaccine to market would do wonders for investors confidence and Glaxo's image. 


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David Williamson owns shares of Johnson & Johnson. Michael Douglass owns shares of Johnson & Johnson. The Motley Fool owns and recommends shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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