Our Chris Johnson is here with another set of "Best in Breed" breakout biotech stocks that are truly the cream of the crop.
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- Five Miraculous New Brain Secrets You Need to Know About
- "Bionic Eyes" Could Make Blindness a Thing of the Past
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The tech sector has been having a field day lately, and our Chris Johnson is back with his latest "Best in Breed" focus: biotech.
When it comes to biotech, Wall Street tends to overreact. Though there's no reason for it to be there, biotech is in the dog house, and investors have been conditioned to punish the sector and its stocks whenever the opportunity presents itself.
You see, there are three main reasons biotech is down: Wall Street is worried about high and rising drug prices, the impact of a possible trade war on foreign sales, and expiring patents for some older medications.
Over the last several years, for example, I've read a number of Wall Street reports about the so-called "biotech patent cliff." Simply stated, a drug falls off that "cliff" when its patent runs out and it starts facing competition from generics.
And a number of successful drugs out there are rapidly approaching their patent cliffs.
That sounds bad.
But there are good things happening in biotech, as well. In fact, what you don't hear much about is that the industry is about to bust out.
For example, I was thrilled to see a recent report from Clarivant Analytics, a research firm that works closely with industry leaders and top universities, which says a total of 12 compounds being released in 2018 could become blockbusters.
So I went through the data and found one ultimate biotech blockbuster that I think could lead the pack.
Insys Therapeutics - our "War on Pain" biotech play - has given us a profit of more than 10.7% since we recommended the stock a little less than two weeks ago.
I hope you like profits, because that's just for starters.
The U.S. Food and Drug Administration (FDA) last week approved the final "product label" for the company's new synthetic marijuana drug - which means Insys can bring this new therapy to market in August.
Investors who specialize in drug stocks are always trying to pull profits from trades based on the three-step FDA "phalanx" that up-and-coming biotechs must navigate to finally get a new drug to market.
But if you really want to cash in, commercialization is the "triggering event" that can make that happen.
And that's exactly where Insys is right now.
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Stroke kills an American every four minutes - more than 525,000 individuals each year - and nearly 300,000 more fall victim to its debilitating consequences.
The onset of symptoms signal a dire emergency. According to the National Stroke Association, they can include:
- Sudden numbness or weakness of the face, arm or leg, especially on one side of the body;
- Sudden confusion, trouble speaking or understanding;
- Sudden trouble seeing or blurred vision in one or both eyes; and/or
- Sudden trouble walking, dizziness, loss of balance or coordination.
There are two types of stroke: hemorrhagic and ischemic. The first results from a ruptured blood vessel in the brain, and the other from an inadequate blood supply, usually due to a blood clot blocking an artery that feeds the brain.
The second variety, ischemic stroke, is by far the more common. Nearly nine out of 10 are of this type. And that's fortunate, because an ischemic stroke could be relatively easy to prevent - provided you see it coming.
If you had the technology to find and map arterial blockages safely, simply, and quickly, you could intervene with a relatively simple medical procedure, clear the blockage, and bring down that enormous annual incidence of stroke to a much smaller number.
Does such a technology exist?
Currently, doctors can use an ultrasound machine to detect the presence of an occlusion (blockage) or stenosis (narrowing) in a carotid or cerebral artery, but the patient then has to undergo a CT scan or MRI for more definitive information.
It's a complicated, drawn-out, and extremely expensive process, and you would think a single-step, cheaper technology might be a game changer - and represent a windfall for investors.
One micro-cap biotech in Vancouver, Canada, CVR Medical, is counting on exactly that with its new carotid stenotic scan (CSS) device.
The device is about to enter pivotal clinical trials, and after they're completed, will go to the U.S. Food and Drug Administration (FDA) for marketing approval.
The CSS could save the government up to $34 billion a year, according to the CDC, and more importantly, hundreds of thousands of lives in the United States and around the world.
That's great news for patients and their families. And it has proven a terrific opportunity for investors, too. Since the company's IPO in November 2016, the stock is already up over 90%.
But here's the thing. This device may not be the silver bullet it's cracked up to be. And the stock isn't, either.
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Big-cap investors were profoundly underwhelmed when the Obama administration caused Pfizer Inc. to cancel a $150 billion buyout of another massive pharma, Allergan Plc.
Like most deal-making at this level, there was a lot at stake. Allergan has a portfolio packed with name-brand drugs with long patent lives and a robust generics business. What's more, the deal would have allowed Pfizer to relocate its headquarters to the (extremely) tax-friendly Republic of Ireland and save a ton on payments to Uncle Sam.
Now, normally when a deal like this falls through, the shares take a serious pounding, but the smart money is holding its nerve. In fact, the stock is up just over 10% year to date. That says a lot.
Those investors, along with folks who buy in right now, stand to be richly rewarded in the future.
One by one, the bubbles are bursting...
First it was the commodities bubble that blew up in mid-2014, which caused the collapse of energy and commodity stocks -they are now down between 40-80%.
It also caused the end of the corporate credit bubble in high yield bonds and bank loans over the second half of 2014 and into this year.
Most biotech stocks are growth plays, so you'll almost never find one that pays anything more than a bare bones dividend. But this company has a distinct advantage that allows it to reward its shareholders - big-time. Michael Robinson explains.
There's a deadly problem with one of the nation's major medical markets - vaccines.
The technology we use today to prevent diseases like the flu, chicken pox, and polio is hopelessly outdated.
It still relies on the delivery of a portion of the actual virus to the patient to develop immunity. Some of these agents are still grown in chicken eggs, just like they were back in the 1930s. And the vaccines themselves or their additives can still make people sick.
But what if you could develop a whole new class of vaccines that were actually safe using a synthetic DNA? Better yet, what if you could vaccinate yourself against HIV, cervical cancer, leukemia, and hepatitis?
The payoff would be tremendous...
For example, teams all over the world are now in their labs looking to create novel biotech compounds or drugs by inserting synthetic DNA into cells, either living or artificial. They're also growing new microorganisms that yield biofuels to be used in lieu of oil.
Trouble is, the process is so complex that it can take days to synthesize these man-made genes, usually in small batches.
Not only is it time consuming, but it requires the use of costly robots and other advanced gear. Simply stated, if someone came along with a breakthrough that greatly speeded up the development of synthetic genes, it could affect several industries at once, not to mention its own value in the market.
Allow me to introduce you to Gen9 Inc. The company is blazing a trail in the development of scalable technologies for synthesizing genes.
Now, Gen9 is a small, new dynamic company. And its potential is huge.
It was formed last summer around a unique new device that greatly speeds up the process of creating synthetic DNA.
Even better, it cuts the cost of that process by leaps and bounds.
Next June, the nine justices are expected to settle - once and for all - whether companies can patent human genes in the United States.
The Patent and Trademark Office has been issuing patents on DNA for nearly 30 years, according to Bloomberg Businessweek.
Roughly 4,000 of the 22,000 human genes now have some form of patent.
But the American Civil Liberties Union has challenged the practice in Association for Molecular Pathology v. Myriad Genetics. Now that case will go to the highest court in the country.
At heart, the legal question sounds simple: Does Myriad Genetics Inc. (NasdaqGS:MYGN) have the right to patent two genes that signal whether a woman is at higher risk of getting cancer of the breasts or ovaries?
Myriad of course did not invent or create the breast cancer predisposition genes, referred to as BRCA genes.
But it did create something called the BRACAnalysis test that looks for mutations on these genes. Those mutations are associated with much greater risks of breast and ovarian cancer.
Usually firms cannot get that kind of market protection for something that is clearly a product of nature. But in this case, Myriad has developed a process of extracting a gene that makes the resulting molecule novel and chemically different from DNA that naturally occurs in our bodies.
And, after all, it took Myriad 17 years and $500 million to develop the test. Without barriers to entry, other firms could simply come in, take advantage of all that costly effort and sell a knockoff for less money.
Even if that weren't illegal, it's obviously unfair.
Let's dig into the case and why it matters to you...
Here's why: biotech stocks have been in a stealth bull market in 2012.
In fact, the values of the 230 publicly-traded biotech companies tracked by the BioWorld Stock Report have jumped by an average 38% year-to-date.
The third quarter was especially hot. The Nasdaq Biotechnology Index rose 10% over that time frame and is up a healthy 37% this year.
And, nothing is hotter than companies focused on the battle against cancer.
Take Medivation Inc. (Nasdaq: MDVN), for example. This California-based biotech has jumped from $23 to $46 a share, largely on the approval of Xtandi, its novel prostate cancer drug.
Thousands of other experimental drugs are going through various stages of clinical trials, and the largest category in the pipeline is cancer drugs. With that in mind, it's safe to say that if you're looking for a stock with big upside potential, cancer-driven biotech stocks should be high on your list. Biotech Stocks: Cancer Research is Paying Off
A cancer diagnosis was once a death sentence -- especially if you were diagnosed with the disease in its late stages.
But, both government and industry have spent vast sums in the last decade researching how cancers develop and spread.
And now all that investment is starting to pay off -- recent clinical trials and treatment breakthroughs show real promise.
The newest cancer research focuses on three fronts.
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I predict that in the near future, robots will be so human-like that it will seem natural for us interact with them. We'll also see the advent of people who are what I call "bionics" - those who put computer chips or other devices in their brains or bodies.
As I see it, we are fast approaching the day in which man and machine become fused together.
Just in the last few days, researchers reported major breakthroughs that promise to do just that. In a moment, I'll tell you all about it.
First, remember the new hydrogel we investigated last Wednesday - the material that could greatly improve human health and aging by replacing damaged cartilage?
Turns out there's another part of the part of the story we need to know about.
This type of hydrogel could play a vital role in the cutting-edge field of robotics, too.
See, we're getting very close to the day in which we augment robots with "smart" human tissue. We'll grow tissue in labs and equip it with onboard electronics made possible by nanotech circuits.
That's where the hydrogel would come in handy. We won't just replace damaged cartilage in people. We'll use that or something like it to link sensor-laden tissue inside robots or in people with organ transplants or artificial limbs.
Just two weeks ago, a research team from MIT and the University of Pennsylvania said they had blurred the boundary between biology and machines even further. They genetically engineered skeletal muscles for robots that work by responding to light.
This is just amazing...
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And our understanding of the brain is about to reach critical mass.
Our knowledge of the human brain grows by leaps and bounds almost every week. In just the last two weeks, researchers have made several new breakthroughs crucial to learning more about diseases that can cause mental illness or kill us outright.
I predict that in the near future our knowledge of the brain will become so complete we will find cures for such deadly diseases as Alzheimer's and Parkinson's. The same holds for depression and schizophrenia.
And that's one of the key benefits of living in the Era of Radical Change. What was a deep mystery about the brain (and other areas) just a few months ago is now much better understood.
Of course, the pace of change is nothing short of amazing. Consider that as I was preparing this report on five new brain secrets, I came across two more brand-new advances in brain science. Each one holds great promise in our drive to live, longer, healthier, and smarter lives.
Take a look...
Brain Secret No. 1: SuperAgers Have the Right Kind of "Senior Moments"
For decades, researchers have studied the brains of diseased older patients to see what went "wrong." They focus on the origin of diseases, like Alzheimer's, that cause memory loss or dementia.
But a team at Northwestern University took just the opposite approach - they've been studying the brains of highly alert seniors. And the results give hope to millions of aging Baby Boomers.
Turns out there's an elite group of older folks called "SuperAgers" whose brains seem to defy the effects of aging. In fact, their brains match those of people 30 years younger.
Some of you were excited by the possibilities. Take Matt:
"As someone who has bounced back from a severe head injury 25 years ago to do things the brain injury rehab team told me would simply not be possible - complete my bachelor's degree as well as a master's, get married, and subsequently raise a son on my own as a single parent, etc. - I am especially excited about the possibilities at the juncture of neurological research, computing technology, and prosthetics. I will be overjoyed when the day comes that I can once again use both my hands to type 100 words/minute with few to no mistakes, like I could when I first learned to type on an electric typewriter, nearly 40 years ago."
On the other hand, several of you thought it sounded like a nightmare. Here's what Claire had to say:
"Transhumanism is a dark future that is presented as wonderful, but which will alienate those who embrace it from their humanity... Not for me, I would rather remain human."
Either way, it seems bionic tech is actually moving faster than I thought...
Restoring Sight to the Blind
You may recall that I cited two examples of future devices to enhance your eyes. One is a pair of contact lenses, and the other is an implant that would go in your retina. Both could access the wireless Web to keep you connected to the world's vast database of knowledge, wherever you are.
Well, it's come out that at least two companies hope to start selling bionic eyes in the U.S. within the next 16 months.
Neither of these designs is made to surf the Web. Instead, these cutting-edge breakthroughs could help millions of blind or visually impaired people to see again.
Take a look...