Monday, June 24, 2019

6/23/19

Biopharma/Investing
--------------------------
  If you want a good laugh, read Canopy Growth's Q4 press release (issued Friday, of course). Revenue of 226m (CAD), gross profit of 51m, EBITDA of -257m, all yours for a mere 18 billion. Revenue is growing rapidly. Let's assume revenue growth starts to slow at 1b CAD and somehow gross margins improve to 50% (16% right now, but off due to underutilization). 500m gross profit would be great, resulting in around 200m-350m CAD net income. 50x-90x earnings isn't too crazy if growth keeps going.
  The real problem is pricing, market share & market size I think. For the largest player, Canopy has fairly small market share ($400m annual run rate) relative to the market opportunity people dream of and discuss. The recreational business was down sequentially, not a great sign, and the medical business was down a huge amount due to reclassification to some products as recreational (!) With SG&A > Gross Profit (even if you massively re-adjust GM% to 50%!), the company is investing a lot to see very little. Still, more growth will help a lot. I don't have any visibility into Q1 (CQ2)--quite hazy (sorry, at least one pun is necessary) especially from here, but the recreational business down q/q is alarming for what was such a high growth business. It doesn't feel like the company is capacity constrained, but I'm not too sure.
  With massive capacity investment in the industry, it's hard to see pricing stay the same. The demand for marijuana is what it is, but the gold rush of investment is there. Branding may allow for some stickiness, and then pricing power, but others have brands as well. In the long run, you still may view CGC as the next MO, but I like the risk/reward. If Q1 is bad (revenue down q/q or even flat or small growth), the stock might get cut in half. If they continue on a torrential pace, a lot of that growth is expected and doesn't mean a lot unless margins improve. A -100% operating margin is a little hard to live with when the company does have some scale (half a billion in revenue isn't tiny).

Little Black Stretchy Pants - Chip Wilson
------------------------------------------------
  Read this book. Founders' stories of truly great companies are rare to begin with. But Wilson's story stands out. A day doesn't go by (prison or not) where people don't ask me what the keys to success are. I see the inverse behavior a lot, too: "Gee, that founder is so smart, I don't think I could do what he did". Chip Wilson's book explains ordinary people are capable of extraordinary things if they believe in themselves, focus intensely on their industry, are 100% authentic, have integrity to their goals, plan ahead and are accountable. The list is by no means exhaustive but Wilson covers the invisible areas of entrepreneurship 'that elevate one from mediocrity'.
  I'm bearish on LULU. This book is part of due diligence. If Chip increased his stake in LULU or came back to the company (even as Director), I'd probably be a bull. Drug companies are far more modular than any other type of business. Optimizing a medicine is not hard. Finding new medicines (internally or externally) is. Designing that engine and setting that strategy is the limited creative part of a pharmaceutical business.
  Obviously I sympathize with Wilson on every level. We're both successful (him around 10x-20x me!) He's been dragged by media lies and admits he is a bit of a liability of social media. He doesn't apologize for 'thinking out loud'. Neither do I. I'll bite my tongue on what he thinks about BODs. His personal philosophy aligns with mine almost exactly (Rand fan).
  Do I... have a man crush?
  The actual book part of the book is fairly awful. Chip's story is so great, I couldn't put it down, but there is a reason he is not a professional writer. I don't think anyone was expecting Goethe, but the book has at least 10 typos. I also wouldn't be surprised if the mass media publishing houses passed on the book for Chip's awkward comments on LULU's clothing not working for all women. He was shockingly taken out of context--the guy seems to have done more for women in corporate America than anyone I've heard of. With billions of dollars, a beautiful and talented wife, and at least one new fan, Wilson gets the last laugh--not because of his success--but because he set out his goals and achieved them. His zen-like state is the ideal to achieve to, not the stock price he set. His mentorship of dozens, maybe hundreds or thousands of young achievers is the metric to analyze, not $ per square foot.

Darkness to Light - Lamar Odom
---------------------------------------
  Odom's tumultuous life makes for a fascinating read. Who didn't want to be an NBA star growing up? What would that life be like? As its back cover promises, this quick read throws dozens of emotions at you, quickly and potently. Frank and direct, Odom emerges as a very complex character, but his own perspective is very matter-of-fact and not terribly introspective. In some ways the book is less of a memoir and more of a behind-the-scenes summary of a tabloid life.

Personal
-------------
  I'm re-learning Albanian. Why? I don't know. I miss my Mom and the language reminds me of her. I bawled my eyes out at sentencing solely because I saw my mother there and felt, for the first time, that despite my own incorrigible, defiant and indestructible nature, I took a sizable part of the last years we had together. I had already borrowed many of those years to focus on my business life, and now I've had to lose more in prison, largely at my own doing. So, perhaps an enhanced ability to communicate with momma will atone for my penchant for self-destruction. When I get home, I promise to give my family a grand tour of the Balkans. So many people here lose their parents during 'their bid'. At this rate, I'm looking lucky, but tempting fate with the downside of others is unfair to them.

Longs
----------
BMRN - 485 - 82.13 - (39,833.05) - 87.91 - 42,636.35 - 2,803.30
ALXN - 304 - 131.69 - (40,033.76) - 132.39 - 40,246.56 - 212.80
REGN - 96 - 312.86 - (30,034.56) - 320.26 - 30,744.96 - 710.40
RGNX - 437 - 45.80 - (20,014.60) - 53.19 - 23,244.03 - 3,229.43
UBER - 478 - 41.87 - (20,013.86) - 44.00 - 21,032.00 - 1,018.14
GSK - 511 - 39.08 - (19,969.88) - 40.27 - 20,577.97 - 608.09
RARE - 338 - 59.17 - (19,999.46) - 62.60 - 21,158.80 - 1,159.34
ORCL - 366 - 54.65 - (20,001.90) - 56.12 - 20,539.92 - 538.02
GBT - 317 - 63.00 - (19,971.00) - 63.00 - 19,971.00 - 0.00
UTHR - 193 - 77.51 - (14,959.43) - 77.51 - 14,959.43 - 0.00
ODT - 459 - 21.77 - (9,992.43) - 28.27 - 12,975.93 - 2,983.50
CLIN - 795 - 990.50 - (9,843.09) - 1,014.00 - 10,235.63 - 392.54
AMGN - 58 - 171.85 - (9,967.30) - 187.11 - 10,852.38 - 885.08
SGEN - 148 - 67.64 - (10,010.72) - 71.74 - 10,617.52 - 606.80
BOLD - 259 - 38.58 - (9,992.22) - 40.40 - 10,463.60 - 471.38
ZGNX - 257 - 38.97 - (10,015.29) - 40.62 - 10,439.34 - 424.05
SRPT - 82 - 122.00 - (10,004.00) - 129.88 - 10,650.16 - 646.16
BMY - 202 - 49.34 - (9,966.68) - 49.34 - 9,966.68 - 0.00
4151 - 542 - 2,030 - (10,002.36) - 1984 - 9,775.71 - (226.65)
PTCT - 245 - 40.86 - (10,010.70) - 43.65 - 10,694.25 - 683.55
HNSA - 543 - 177.40 - (10,139.81) - 161.30 - 9,219.57 - (920.24)
RYTM - 383 - 26.12 - (10,003.96) - 22.02 - 8,433.66 - (1,570.30)
BIIB - 44 - 229.18 - (10,083.92) - 239.09 - 10,519.96 - 436.04
AMZN - 5 - 1,889.98 - (9,449.90) - 1,911.30 - 9,556.50 - 106.60
GILD - 151 - 66.36 - (10,020.36) - 69.38 - 10,476.38 - 456.02
HALO - 640 - 15.61 - (9,990.40) - 16.43 - 10,515.20 - 524.80
QURE - 168 - 59.31 - (9,964.08) - 82.19 - 13,807.92 - 3,843.84
FOLD - 887 - 11.27 - (9,996.49) - 12.39 - 10,989.93 - 993.44
ONCE - 102 - 97.70 - (9,965.40) - 105.07 - 10,717.14 - 751.74
LJPC - 1016 - 9.84 - (9,997.44) - 8.75 - 8,890.00 - (1,107.44)
VIFN - 71 - 140.50 - (9,975.50) - 139.95 - 9,936.45 - (39.05)
UCB - 131 - 68.92 - (9,931.37) - 71.96 - 10,369.44 - 438.07
CRIS - 5,464 - 1.83 - (9,999.12) - 1.63 - 8,906.32 - (1,092.80)
AXGT - 1,189 - 8.41 - (9,999.49) - 6.86 - 8,156.54 - (1,842.95)
BPMC - 52 - 95.17 - (4,948.84) - 95.17 - 4,948.84 - 0.00
BLUE - 41 - 119.87 - (4,914.67) - 119.87 - 4,914.67 - 0.00
TH - 687 - 7.27 - (4,994.49) - 7.27 - 4,994.49 - 0.00
EIGR - 449 - 11.13 - (4,997.37) - 11.13 - 4,997.37 - 0.00
NXTC - 68 - 14.62 - (994.16) - 14.62 - 994.16 - 0.00
Long P&L: 18,123.70
Long Exposure: 523,121 (52%)

Viromed - (130) - 191,800 - 24,934.00 - 191,800 - (24,934.00) - 0.00
MDCO - (616) - 32.44 - 19,983.04 - 36.40 - (22,422.40) - (2,439.36)
VZ - (351) - 56.91 - 19,975.41 - 57.77 - (20,277.27) - (301.86)
CMCSA - (463) - 43.15 - 19,978.45 - 43.56 - (20,168.28) - (189.83)
T - (653) - 30.52 - 19,929.56 - 32.45 - (21,189.85) - (1,260.29)
WEED - (314) - 63.69 - 19,998.66 - 53.28 - (16,729.92) - 3,268.74
ACB - (1,776) - 11.26 - 19,997.76 - 9.65 - (17,138.40) - 2,859.36
MRK - (256) - 78.19 - 20,016.64 - 84.57 - (21,649.92) - (1,633.28)
ACAD - (774) - 25.84 - 20,000.16 - 26.00 - (20,124.00) - (123.84)
XON - (3,179) - 6.29 - 19,995.91 - 7.57 - (24,065.03) - (4,069.12)
HCA - (116) - 128.23 - 14,874.68 - 128.23 - (14,874.68) - 0.00
LULU - (84) - 178.08 - 14,958.66 - 181.87 - (15,277.08) - (318.42)
SAGE - (60) - 166.02 - 9,961.20 - 182.65 - (10,959.00) - (997.80)
TLRY - (201) - 49.85 - 10,019.85 - 50.45 - (10,140.45) - (120.60)
NBIX - (127) - 78.80 - 10,007.60 - 85.00 - (10,795.00) - (787.40)
RETA - (111) - 89.92 - 9,981.12 - 87.41 - (9,702.51) - 278.61
RUBY - (649) - 15.41 - 10,001.09 - 13.70 - (8.891.30) - 1,109.79
TARO - (95) - 105.66 - 10,037.70 - 85.28 - (8,101.60) - 1,936.10
DIS - (75) - 134.04 - 10,053.00 - 140.23 - (10,517.25) - (464.25)
MRNA - (401) - 24.92 - 14.70 - 9,992.92 - 14.70 - (5,894.70) - 4,098.22
FB - (53) - 188.34 - 9,982.02 - 191.14 - (10,130.42) - (148.40)
TEVA - (860) - 11.63 - 10,001.80 - 8.45 - (7,267.00) - 2,734.80
MYL - (509) - 19.64 - 9,996.76 - 18.32 - (9,324.88) - 671.88
TSLA - (48) - 204.50 - 9,816.00 - 221.86 - (10,649.28) - (833.28)
BA - (28) - 350.64 - 9,817.92 - 371.84 - (10,411.52) - (593.60)
CTAS - (43) - 231.54 - 9,956.22 - 232.38 - (9,992.34) - (36.12)
GE - (1,008) - 9.92 - 9,999.36 - 10.23 - (10,563.84) - (564.48)
HD - (50) - 197.17 - 9,858.50 - 209.39 - (10,469.50) - (611.00)
Short P&L: 1,464.57
Short Exposure: 392,660 (39%)

Total P&L: 19,588.27 (+1.96%)

Gross Exposure: 915,781 (92%)
Net Exposure: 130,461 (13%)

Saturday, June 22, 2019

6/21/19

Biopharma/Investing 
-------------------------- 
GBT +200bps - I'm sorry I left you. 
UTHR +150bps - Cheapo, sorta good management. 
BMY +100bps - Pretty cheap, CELG new launches are good. 
BPMC +50bps - Taking the ARRY bait. 
BLUE +50bps - TDT gets you a long by itself. BCMA, SCD don't hurt. 
TH +50bps - Cheap engine that could. 
EIGR +50bps - Interesting. 
NXTC +10bps - Lotto ticket. 

HCA -150bps - Climate change short. All the hospitals are in the south! 
LULU -100bps - Reading Chip's book. More soon... 

Reading about serotonylation (it's a thing!) makes me wonder about SSRI MOA. 

"There seems no reason to doubt that in a short time wireless telephony will be established between every country on the globe". -- Nature 1919 

On Climate Change - Through the Lens of MIT Technology Review - Part I 

The cover of Issue 3 of this year's "MIT Technology Review" states "Welcome to climate change" with a photo of sunglasses on a beach, with a forboding conflagaration reflected in the lenses. Think about the last time someone sarcastically 'welcomed' you to something. The smug know-it-all sarcastically patronizing your ignorance: climate change is apparently a hellacious "Revelations"-ushering phenomenon, and perhaps a medley of wisdom awaits inside the Review for those seeking salvation. 

Alas, no Song of Solomon is to be found. Gideon Lichtfield introduces the issue by amplifying John Holdren who claimed we have to "mitigate, adapt or suffer" in response to climate change. With the same resigned and pathetic outlook, Lichtfield & Co. give us ninety-six pages of smug sorrow that seems to admonish the reader while holding a Damoclean point: 'there's nothing you can do!' Lichtfield abandons his magazine's very title, ignoring the fascinating new technologies that promise to, you know, solve the problem. Instead we're told to "adapt", but mostly panic and suffer. 

"What would you pay to save the world?" by David Rotman is the first story, humorously rendering the world map in a color range from a simply alarming yellow/orange (the low-end emissions scenario of 0-1 degree warming--which would be a wonderful outcome) to the damnation of dark red (with a +10 degree C warming, presumably the end of humanity). Forget green, white or blue. Just yellow/orange or red. Bad or worse. Makes sense. (The earth has been warming at around 0.2degrees a decade for the last 4). 

Rotman introduces the 'social cost of carbon', an economic attempt to quantify emissions costs. The article seems to endorse the Obama administration's value of $40/ton (Trump's team has it at $1-7, which we'll ignore). The only article in the issue with data is very welcome to someone like myself. With actual numbers, one can make up their own mind without an untrained foaming-at-the-mouth agenda distorting reality. 

We see the CO2 parts per million (PPM) of 410 in 2020, up from 380 in 2005. A seeming linear relationship with high r^2 around y= 380 + 2x or y = 380 + 2(x - 2005) where x >= 2005. Of course this relationship could only exist for the prior 205 years (tongue-in-cheek). Did we have no carbon dioxide 205 years ago? Hardly possible. So the relationship isn't linear, at least not at the most recent slope, but it has been linear for fifteen years, which is important. 

The second dataset to look at is "gigatons of carbon/year" which is also labeled "trends in CO2 emissions from fossil fuels, by country". Interestingly, the US has the same CO2 emission rate as 30 years ago. I think we deserve a pat on the back, instead of the self-immolating scorn. China? Well, they've gone from around 0 to 2.5 gigatons, nearly double our ~1.5gigatons. Maybe those tarrifs ARE a good idea? Europe has done even better than the US, with CO2 levels the same as 50 years ago! India is creeping up rapidly. What does this mean? If you sum the countries in the graph, from 2005 to 2020, 4.8 gigatons has grown to 5.9 gigatons (+23%). In the same time period, CO2 PPM has only increased 8% (temp is +0.3degC). We're missing some data: Africa, Canada, Mexico, Japan, Latin America, Middle East, Rest of Asia are not included in the original dataset. Even if we make some bad-for-our-argument assumptions, it appears not all of the carbon we dump from fossil fuels ends up in the atomsphere (acknowledged later in the rag). Anywhere between a 1/3-1/2 actually ends up in the atmosphere. Environmental homeostasis is at work--I believe we learned in kindergarten that plants such as trees withdraw CO2 from the air. That's nice of those plants. 

What about temperature? Why is there not one graph of temp in the whole issue? It's because the earth hasn't gotten a whole lot hotter. The major temperature data set I referenced a few months ago notes that temps are 0.7 degC higher than the 1951-1980 mean. It is now 39 years after 1980. In that period, the China+US+EU28+India emissions have risen from 2.9gt (0.4+1.2+1.2+0.1) to 5.9gt (2.7+1.5+1.0+0.7), an increase of ~100%. At the current derivative, net emissions have all but stopped growing (declines in the US and EU offset by tiny growth in China and moderate growth in India). So despite 3.0gt more of emissions, temperature has increased less than one degree. The removal of carbon by the environment and the misestimation of CO2 parts per million as the sole variable to estimate temperature change is the likely reason. 

To be fair, it is also possible that the increased emissions have a delayed effect on temperature and we may see higher temperatures soon. The decade-by-decade data is somewhat alarming: +0.2degC has been the norm for four decades in a row. That is still only a +2degC change for a century, ignoring that the second derivative of emissions is negative and the world is focused on this problem. 

So what are we so afraid of? China and India have basically decimated the environment with emissions and temperature has barely budged. With China emissions growth slowed at worst and halted or decreasing at best, India committed to change and the US/EU offsetting the gap, why worry when even huge growth in emissions did not cause the catastrophe predicted years ago? All this data points to is that climate change is, at worst, under control after policy changes in US/EU starting in 2000 and already or likely to be soon adapted in China/India. At best, it is a total fallacy based on correlating these three data sets. I haven't even thought about the idea that advanced technology and productivity continue to clobber this problem. A bet on human ingenuity has never failed. I think people like Lichtfield and Rotman are dangerous. Sort of reminiscent of nuclear weapons fearmongerers who insist the world will end in a miasma of radioactive fallout. I'm a realistic optimist and I don't see what they do. 

If you think about the second dataset, it is particularly remarkable US and EU emissions are flat from 30 and 50 years ago despite large population and GDP growth. On a per capita and per consumption basis, emissions have dropped markedly. Again, why the inferiority complex and self-flaggelation? We are doing an amazing job of cutting emissions. China appears to have heard the sirens as well, at least stopping, and ideally soon reversing its emissions. 

From here the MIT issue quickly devolves into non sequitirs and eventual insanity. The next story is by James Temple, "India's dilemma" notes that "no matter how fast the country builds... ... its surging economy will warm the planet--unless others do more to help." The desire to be a victim here astounds me. Temple acknowledges the massive build of solar energy India is undertaking but still defecates mercilessly on that achievement. It's true India's problems are American problems, because we do share the world. But the article by Rotman humorously contradicts Temple with: 

["India is the big loser. India bears a huge share of the global cost of carbon--more than 20%. It also stands out for how little it has actually contributed to the world's carbon emissions. It's a serious equity issue."] 

Well, which is it? Is India warming up the world or a "little contributor to the world's carbon emissions"? 

A brief interview of Mariana Mazzucato by Rotman continues the issue. Rotman and Mazzucato namedrop Alexandria Ocasio-Cortez, not exactly the highest intellectual authority on climate science, meteorology, economics or really anything, but the economist Mazzucato (who aptly wrote a book called "Rethinking Capitalism") notes the need to reduce emissions. As I noted earlier, huge emissions haven't led to actually large increases in CO2 PPM, and those small increases have resulted in little signal of temperature change. The "Green New Deal" is about "greening the entire economy" according to Mazzucato. To what end? "It should put more pressure on profits being reinvested back into the economy rather than used for areas like share buybacks", she notes. I like the slippery slope of using climate change to dictate capital deployment choices for the private sector. "Set a direction and then use the full array of government instruments...". Use the full array of government instruments to dictate what businesses do, in order to satisfy changing one outcome, which predicated on a faulty syllogism, will keep non-existant temperature growth at bay. Got it. GND = Good for Nothing Democrats. 

"What a Nuclear Waste" by Max Kim is an interesting story on South Korea's nuclear industry, but it has nothing to do with climate change. While Lichtfield points out nuclear has dropped and other renewable energy has taken its place, the data presented don't stratify for geography and are thus misleading. Kim closes the sane first third of the issue and sets the stage for increasing melodrama: "adaptation". No discussion of interesting breakthroughs to 'save the environment' are necessary. Even the first third of the mag on 'mitigation' is unrealistically dour. I guess a magazine headline that read 'climate change may be under control!' wouldn't go very far. Who would want to feel... good? 

In "the threat to the world's breadbasket", Adam Piore walks through genetic modification of crops. Food prices have dropped as farms have had unprecedented productivity. Despite that, Piore takes an alarming view instead of the hopeful one--the genetic technologies mentioned in the article are hugely promising. The agricultural industry's success in enabling harvest success under a variety of conditions is looked at as alarming instead of enabling. 

"The mind-boggling problem of keeping New York dry" by Courtney Humphries made me incrementally bearish of NYC real estate, but Humphries just cites the NYC Panel on Climate Change where temperature "could" increase by 2-3 degrees C by the middle of the century. Well, temperature has only increased by less than a degree in thirty years under extreme emissions growth, so Humphries must have a better crystal ball than anyone else. I'm sure the choice of "could" here comes from a range of estimates. Why be calm when you can assume apocalypse? Imagine these folks as investors. "I'm bearish". "Why?" "Because the prices of the assets I'm shorting could drop." QED. 

In "Already hot and getting hotter", Lauren Zanolli bodly claims that "near the equator, climate change is no mere theory--it's already disrupting lives and economies". This is because seaweed--sargassum--is growing. Despite the CO2 withdrawal that seaweed brings (homeostasis), tourism is down in a part of Mexico. So, Mexico wants to remove it, I guess. Zanolli never gives us any data, but convincingly notes "last year is believed to be the worst ever in the region". Zanolli connects the dots all the way to drug cartels taking over Mexico because of the seaweed, as the local hotel trade group saw a 10% decrease in hotel occupancy last year. Inference has seen better days. 

In "strong coffee", Diego Ortiz tells the hopeful story of new coffee genes that can grow at higher temperatures. This is the real story of climate change. Adaptation is fairly simple and mundane. It's more fun to cry wolf, and the Internet has a vast archive of such stories that claimed global catastrophe well in advance of 2020. Hasn't happened. Why? Ecological homeostasis, human technological adaptation, overreliance on poor logic. Folks are more excited about being the first to warn you about a dangerous event than stopping the dangerous event. I guess I'm always the first person to do something in an emergency instead of gawking, whispering or complaining. 

In "Preparing for the coming storm" by Karen Hao, we learn about a community activist who saves the day in Florida. The relevance to climate change isn't there, but the story is heartwarming. Storms in Florida have been happening for a long time, it turns out. 

Monday, June 17, 2019

6/16/19

21 months in, 18-26 months to go

Biopharma/Investing
---------------------------
  I love that FB is making a currency. It doesn't sound like they'll make any money on it--just tick off JPM, V, MC and the US Government. Move fast & break things, baby.

  LULU basically has to make a sneaker to not turn into the next DECK at best and ANF/AEO/PSUN/etc. at worst. The fashion tide always goes out. 'Athlesiure' could be here to stay, but it's around 17% of all clothing sales (LULU has around 10% of that). The stock is expensive even if they double revenue, which I don't think will happen, as the clothes don't appeal to men and there is a saturation level at some point (probably already). Trucker hats, sweatbands, blossom hats, denim, velour tracksuits, jumpsuits, uggz and expensive leggings.

  Looking at HSY closely.

  I think I may have found one of the best biotech shorts in my career. Life. Whatever. It's a foreign stock. Anyone remember Active Biotech? That was a good one! Mesoblast. So many memories. Telik. Northfield. Neoprobe. Vital. Celladon. MannKind. GenVec. Oncothyreon. I can't even remember all of them. This beats them, I think.

Personal
------------
I'm writing an essay on climate change. Look for it soon!
After that, I'll be writing on MMT, which is a sprawling topic.

BMRN - 485 - 82.13 - (39,833.05) - 80.84 - 39,207.40 - (625.65)
ALXN - 304 - 131.69 - (40,033.76) - 117.93 - 35,850.72 - (4,183.04)
REGN - 96 - 312.86 - (30,034.56) - 305.24 - 29,303.04 - (731.52)
RGNX - 437 - 45.80 - (20,014.60) - 48.27 - 21,093.99 - 1,079.39
UBER - 478 - 41.87 - (20,012.62) - 43.23 - 20,663.94 - 651.32
GSK - 511 - 39.08 - (19,969.88) - 40.12 - 20,501.32 - 531.44
RARE - 338 - 59.17 - (19,999.46) - 57.16 - 19,320.08 - (679.38)
ORCL - 366 - 54.65 - (20,001.90) - 53.28 - 19,500.48 - (501.42)
ODT - 459 - 21.77 - (9,992.43) - 25.00 - 11,475.00 - 1,482.57
CLIN - 795 - 990.5 - (9,843.09) - 1030 - 10,235.63 - 392.54
AMGN - 58 - 171.85 - (9,967.30) - 176.08 - 10,212.64 - 245.34
SGEN - 148 - 67.64 - (10,010.72) - 68.50 - 10,138.00 - 127.28
BOLD - 259 - 38.58 - (9,992.22) - 37.95 - 9,829.05 - (163.17)
ZGNX - 257 - 38.97 - (10,015.29) - 39.13 - 10,056.41 - 41.12
SRPT - 82 - 122.00 - (10,004.00) - 119.57 - 9,804.74 - (199.26)
4151 - 542 - 2030 - (10,002.36) - 2034 - 10,022.07 - 19.71
PTCT - 245 - 40.86 - (10,010.70) - 40.01 - 9,802.45 - (208.25)
HNSA - 543 - 177.40 - (10,703.13) - 180.50 - 10,890.17 - 187.03
RYTM - 383 - 26.12 - (9,996.30) - 22.35 - 8,560.05 - (1,436.25)
BIIB - 44 - 229.18 - (10,083.92) - 227.67 - 10,017.48 - (66.44)
AMZN - 5 -1889.98 - (9,449.90) - 1869.67 - 9,348.35 - (101.55)
GILD - 151 - 66.36 - (10,020.36) - 66.36 - 10,020.36 - 0.00
HALO - 640 - 15.61 - (9,990.40) - 15.73 - 10,067.20 - 76.80
QURE - 168 - 59.31 - (9,964.08) - 72.55 - 12,188.40 - 2,224.32
FOLD - 887 - 11.27 - (9,996.49) - 11.35 - 10,067.45 - 70.96
ONCE - 102 - 97.70 - (9,965.40) - 97.70 - 9,965.40 - 0.00
LJPC - 1016  - 9.84 - (9,997.44) - 9.71 - 9,865.36 - (132.08)
VIFN - 71 - 140.50 - (9,975.50) - 138.60 - (9,840.60) - (134.90)
UCB - 131 - 68.92 - (9,931.37) - 70.40 - 10,144.64 - 213.27
CRIS - 5,464 - 1.83 - (9,999.12) - 1.52 - 8,305.28 - (1,693.84)
AXGT - 1,189 - 8.41 - (9,999.49) - 5.12 - 6,087.68 - (3,911.81)
Long P&L: (9,601.34)

MDCO - (616) - 32.44 - 19,983.04 - 35.28 - (21,732.48) - (1,749.44)
VZ - (351) - 56.91 - 19,975.41 - 58.28 - (20,456.28) - (480.87)
CMCSA - (463) - 43.15 - 19,978.45 - 42.31 - (19,589.53) - 388.92
T - (653) - 30.52 - 19,929.56 - 32.35 - (21,124.55) - (1,194.99)
WEED - (314) - 63.69 - 19,998.66 - 55.26 - (17,351.64) - 2,647.02
ACB - (1,776) - 11.26 - 19,997.76 - 10.13 - (17,990.88) - 2,006.88
MRK - (256) - 78.19 - 20,016.64 - 82.78 - (21,191.68) - (1,175.04)
ACAD - (774) - 25.84 - 20,000.16 - 24.26 - (18,777.24) - 1,222.92
XON - (3,179) - 6.29 - 19,995.91 - 7.03 - (22,348.37) - (2,352.46)
SAGE - (60) - 166.02 - 9,961.20 - 174.26 (10,455.60) - (494.40)
TLRY - (201) - 49.85 - 10,019.85 - 39.01 - (7,841.01) - 2,178.84
NBIX - (127) - 78.80 - 10,007.60 - 83.92 - (10,657.84) - (650.24)
RETA - (111) - 89.92 - 9,981.12 - 81.59 - (9,056.49) - 924.63
RUBY - (649) - 15.41 - 10,001.09 - 13.85 - (8,988.65) - 1,012.44
TARO - (95) - 105.66 - 10,037.70 - 89.24 - (8,477.80) - 1,559.90
DIS - (75) - 134.04 - 10,053.00 - 141.65 - (10,623.75) - (570.75)
MRNA - (401) - 24.92 - 9,992.92 - 15.40 - (6,175.40) - 3,817.52
FB - (53) - 188.34 - 9,982.02 - 181.33 - (9,610.49) - 371.53
TEVA - (860) - 11.63 - 10,001.80 - 8.24 - (7,086.40) - 2,915.40
MYL - (509) - 19.64 - 9,996.76 - 17.02 - (8,663.18) - 1,333.58
TSLA - (48) - 204.50 - 9,816.00 - 214.92 - (10,316.16) - (500.16)
BA - (28) - 350.64 - 9,817.92 - 347.16 - (9,720.48) - 97.44
CTAS - (43) - 231.54 - 9,956.22 - 236.37 - (10,163.91) - (207.69)
GE - (1,008) - 9.92 - 9,999.36 - 10.23 - (10,311.84) - (312.48)
HD - (50) - 197.17 - 9,858.50 - 205.77 - (10,288.50) - (430.00)
LULU - (29) - 170.89 - 4,955.81 - 176.71 - (5,124.57) - (168.78)
Short P&L: 10,189.72
Total P&L: 588.38

6/14/19

21 months in! About 50% done.

  Thanks to Catherine for sending me Ray Dalio's essays. I don't think he is right about most of what he's offering. Dailo insists we need to fix capitalism before we see a repeat of the French Revolution. Curious. Dalio is also one of the richest people in the world, having profited immensely from capitalism while producing exactly nothing--a perfect target for the retribution of revolt? It's not surprising he doesn't mention solutions like a 1% stamp tax on all trades or a 60% short-term capital gains tax as potential funding for government spending. Can't do that. How about a retroactive carried interest tax? Capitalism might have to change according to Dalio because perhaps he looks back and fears his own legacy of a lack societal usefulness. Dalio's vulnerability lacks a literary equivalent and pops off the page. I'm not anti-hedge fund: I'm advancing this argument to point out the disingenuous and fallacious. To be fair to RD, a spate of recent books and essays is his public contribution. That, and of course, the perfunctory philanthropic return of some financial arbitrages won over.

  What is wrong with his recent essay? First, I don't think that 'economic inequality' is a 'problem'; it's not even a definable concept. Axiom: Every array, (or 'set' or 'collection' or 'list) of individual data (for instance: income) is sortable. Theorem: In any said array, the list will contain a maximum value and a minimum value. Theorem: The standard deviation (aggregate dispersion of individual values from the mean value) of the array is not a substitute for 'inequality', especially when applied to income data. One proof by contradiction could demonstrate that by homogenizing everyone's income (an idea 6 year old Martin Shkreli considered), wealth and poverty both disappear, and interest in production also disappears, resulting in mass poverty. Certainly this has been demonstrated ad nauseum. So does a force that decreases standard deviation help in 'reducing inequality'? My writing here will illustrate that goal-seeking an arbitrary and meaningless numerical output and ignoring the real world will lead us astray. Dalio's sole evidence is empirical data and he interprets it incorrectly.

  One must examine both ends of the array to understand "inequality". We don't want "inequality", despite its necessary existence as shown above, because we're afraid of the left side of the distribution. We're worried about poverty, for good reason. We can't bear to think of the wealthy lighting money on fire while the poor search through garbage. But poverty has fallen dramatically, thanks to the very capitalist system we're bemoaning. The amount of hungry, sick and dead has been obliterated this century thanks to the root of all evils. Isn't this the trendline we want? Losing the forest for the trees is easy. A recent popular survey about Americans finding $400 for an emergency skirts logic effortlessly. Was the same 'survey' run every year for the last 100 years, inflation-adjusted and without the obviously flawed and biased question format? It doesn't take a statistician to see that the swelling sales of clearly discretionary products like iPhones, 'luxury' clothing and other goods may be better evidence that Americans CAN actually afford an unexpected $400 expensive (<1% of GDP per capita and income for an INDIVIDUAL). Isn't household wealth at an all-time high? Isn't the median income at an all-time high? Doesn't the Internet act as an equalizing force for education and communication, previously restricted by means?

  Nobody wants poverty, but we have to return to reality: properties of an array. There is a bottom 10%, no matter what. There's a bottom 1%, a bottom 43.8%--a bottom arbitrary number you can examine the properties of. How is the bottom faring is the question. The answer is bad. It always sucks for the arbitrary bottom group, whether it's 1453 and you've got the bubonic plague, or 1735 in Pennsylvania or 2018 in Memphis. You can't eliminate the bottom group easily--and that is not the goal. The goal is to lift the quality of life for all members of the array so that even the bottom group enjoys the fundamental human rights and the bottom 5% of 2018 is better than the bottom 5% of 1958. The safety nets for the "bottom" array members have expanded. Glance at a Robinhood or Red Cross balance sheet and one has to wonder who exactly is homeless or hungry in America. Between FEMA, Medicaid, Social Security, Bill Gates & Co and 4% unemployment, I am vexed at the rage against privilege in inequality. The bottom has it better than ever. The problem for 'the bottom' is not resource allocation, similar to HIV medicine in Africa. It is structural issues: misinformation, logistics, tradition, etc. Most importantly, one structural issue is government. Our government has done more to create structural issues than anyone. Witness slavery, mass incarceration, high taxes, indiscriminate warmongering. Should politicians really be trusted to set policy that returns 'equality' of any kind?

  On the other side of the array, extreme wealth has very diminishing returns. Trust me on this one. Life doesn't get better as you become insanely wealthy. There's a reason everyone signs "the giving pledge"--the money is pretty much useless. Unless you somehow think private jets and yachts make your life massively better than your neighbor, most wealth is transitory and unsatisfying. The Chinese have a saying that wealth cannot last more than three generations. Why there is this desperation to take Jeff Bezos' money is beyond me. The billionaires of America are actually remarkable stewards of wealth and set great examples. Buffett, Gates and his fellow tech giants... where's their fatal flaw? Why are we seizing their means again?

  Most of this is tautological. There must be rich, there must be poor. The rich enjoy this surreal fantasy that isn't so great. The poor suffer from idiosyncratic (and sometimes self-inflicted) structural flaws that are very hard to correct. Dalio is spot on when he points to incarceration as one such flaw that perpetuates pressures in the direction of poverty in certain communities (African American, Hispanic). Recent efforts by billionaire Koch brothers and NOT the government to reverse this policy error shows us that we are not to trust elected officials to solve policy problems they create.

  There are more math problems with Dalio and others' work than the willful ignorance of set properties. A country with the US landmass and population makes it is impossible to homogenize the sample size to reach conclusions. What you really have are several different countries in one. If you glance at Europe, you have countries like France and Germany... and countries like Albania and Moldova. If you want to average the entire Eurozone and look at income disparity, you'd be conducting a fool's errand and the US analysis is similar.

  We spent time on both sides of the distribution, so what about mobility--the migration from one side the the other? The data Dalio points to are factually correct, but his interpretation is flawed. Economic mobility is at an all-time high. The Internet, social awareness and acceptance, all-time highs in diversity and all-time lows in racism and bigotry have changed the fabric of America. Read periodicals from 20, 50 and 100 years ago and try and tell me the world is not a better and more equal place. Again, the trend is your friend. Is there frustration and rancor about transgender equality? You bet. That doesn't invalidate the idea that we've come a very long way as a society. It's hard to quantify economic mobility. I think if you look at the wealthiest Americans (most of us are concerned about mobility from the left to right of the distribution), they're mostly younger new-generation Americans. Having the name Rockefeller doesn't guarantee you wealth anymore--it does guarantee heavy estate taxes, though. Where else can a C- City College student come to America and create billions of dollars of wealth. I'm talking about Charles Wang. I got a B+ average.

  More on mobility. Our country has the greatest mobility in the world. Look at the S&P 500 components and then look at other countries. Where is their Google, Microsoft, Apple, Facebook, Pfizer, Merck and Amgen? In most countries other than America, the largest companies (and therefore, employers) are old-line energy and telecom companies. France barely has a technology company to speak of... Dassault? Germany has SAP, Siemens, Bayer and that's about it. And that's the best Europe has to offer. Check out the startup atmosphere in Europe, let alone the rest of the world and tell me again where you'd like to be for economic mobility. Last names still matter out there. As a wise observer noted, folks still try to sneak INTO this country for economic mobility. That includes my parents, and a whole lot of other immigrants. Go start a biotech company in the post-aristocratic European world and get back to me. We've got thousands of public/well-funded private companies here. They're a huge mobility/equalizing force. You can get crowdfunded on the Internet by strangers for crying out loud. Their owners and leaders are diverse--far more diverse than the rest of the world. Stop complaining about a linear equation that doesn't have the slope you want, when the slope is the highest known value there is.

  The real problem is that economic mobility is rarely taken advantage of. Not everyone is a leader. So, are there LESS entrepreneurs and people trying to leap into the next income decile? It sounds strange, but one has to accompany these surveys with actual causal questions. I've met a lot of people that are perfectly happy with their decile. The data suggested by Dalio leads his imagination to believe everyone wants to be in the upper decile. Thanks to the increased quality of life, being in the bottom 30% isn't so bad anymore, Ray. Not everyone is running the rat race you are. So mixing up inference by assuming there is some fictitious barrier instead of considering ennui and satisfaction as the reality is the problem. It's actually kind of great to be in the 50% decile. As I've said, there are tremendous diminishing returns in chasing wealth and folks aren't stupid enough or psychotic enough to "chase the S&P" for the rest of their lives.

  Dalio's best points are investing in education and the family unit. Dalio correctly points out the brutal cycle of incarceration, lack of education and poverty. 4% of children have a parent in prison--think about that! (And Free Shkreli!) But how does a government change the culture of poverty? Throw drug and gun convictions away? I would. We have a second amendment for a reason and when we're talking seriously about legalization of marijuana and Oxycodone is the gateway to illegal opioids, why are we locking up predominantly African Americans for decades at a time? How do we educate more of the 'bottom'? Where is Google in providing those subsidies and programs? Sharing the corporate wealth is a good idea, and the companies should do it voluntarily and efficiently before its involuntary and inefficient. Not only is it the 'right' thing to do, it's not expensive and probably ROIC-positive.

  Dalio is wrong about economic equality and mobility. He employs a very diverse group of 20- and 30-year olds who make millions of dollars. It seems like he is being pressured (internally or externally) to say something about income inequality where his suggested solutions are limited and laughable. I'll address MMT in a future post. Capitalism has to change? That sounds more dangerous than constructive. Change agents cannot be easily controlled. I think the vast majority of Americans is happier than Dalio and the naysayers on the left believe. Trump's election demonstrates that the fire and brimstone the left heaps onto the public for votes is blathering stupidity--a call to action where none is needed. Stirring to the uninitiated, the yawns of the 'average Joes' and not the sirens of limousine (and sometimes billionaire) liberals calling for income equality is an important data set, too.

+ONCE 1%. XON -1%

  Amazon exiting restaurants is great for UBER and GRUB. GRUB has consolidated all of the small payers, and similar to ridesharing, small players are exiting due to lack of scale. Suppliers (whether drivers or restaurants) do not want a plethora of platforms to maintain. You pick the scale platform pretty much regardless of price or features if it is the category leader.

  One friend suggested UBER isn't close to profitability. This isn't close to true! Strip out the insanely expensive self-driving R&D and the 'platform' has been breakeven for a while despite heavy investment that drives 40% bookings growth. 40%! Uber can print several dollars per share of earnings if it felt like it. Remember AMZN!

Wednesday, June 12, 2019

6/11/19

Biopharma/Investing
---------------------------
Remember Clinuvel? Would have been a great takeover!

Lululemon -50bps short. Great brand (for now), well-run company, expensive stock. Fashion fads fade and I am not sure this very North American brand can grow as well in other regions. Other companies are chasing the wave: Victoria's secret, Gap, etc. Will "athlesiure", which Nike mastered into a $150B company, revert for LULU or continue growth? We'll see--I'm going to research DECK UA and other companies to get a sense of the business. Apparel isn't exactly my core competency, but there's only one way to learn. PS: I've liked this stock in the best and I'm not just allergic to growth stocks (see UBER below).

F what you heard: UBER is an amazingly cheap stock, well-run company with a serious moat. +100bps to make 200bps position. Look at the balance sheet! (Don't forget to include the IPO and the ATG investment). Reminds me of FB and GOOG post-IPO. Haven't been this excited in a while.

Studying EW, will have an opinion shortly on the valve juggernaut.

Personal
-------------
As usual, way too much to read, not enough time. Jail is the best (unsolicited) library time. Feeling grateful!

Tuesday, June 11, 2019

6/9/19

Biopharma/Investing
--------------------------
  A good editorial in the 6/4 WSJ by CBS Professor Pierre Yared on the National Debt. One point he misses is that even with "zero coupon" (0% interest rate) debt, ALL debt has a cost. A teenaged Martin Shkreli was mystified when Amgen issued 0% interest bonds one year. Of course, OID creates an implicit interest rate and the myth of a 0% bond, or a "zero" or "zeroes", are just that: no interest payment, but you typically borrow $950 and pay $1000. A HP12c can quickly tell you what the implied interest cost is. The borrower doesn't care about no coupon payments, either, as the total return is the total return. Anyway, the insane national debt levels make me wary of US hegemonic sustainability. With the encroachment of socialist politics and entitlement gaining steam as opposed to losing it, one doesn't have to be a "permabear" to be worried. As a wise man once said, "diversify your bonds".
 
  Is there anything as inane as "modern monetary theory"?

Axovant ($AXGT) seems to be disappearing. The company can't catch a break but I believe. Split adjusted, the stock is at pennies from a recent multi-billion dollar-valuation $20/share. One thing I learned in my career, way too late, is that 'losers average losers' and it is seldom successful to 'double down' on pretty much anything, anytime. Rules are meant to be broken, of course, but my own investing vastly improved after painfully learning that lesson.

ARGX so expensive. UCB and other drugs very competitive. -1% short.
VIFN quite cheap, can quietly grow into a 20B CHF company.
UCB somewhat similar, more pipeline-based (bimekizumab, etc.)
TSLA joining a very trite camp.
ALXN still very comfortable, new management is very smart.
BMRN may add. Really like it.
AMGN may add on 510 success.
QURE may add. Probably gets acquired by PFE or someone like that.
Cannabis stocks have worked nicely, eyeing eventual exit.
Generic shorts have worked nicely, eyeing eventual exit.
MRNA, RETA, RUBY considering adding.

Longs
Ticker - Position - Basis - Cost - Price - Value - P&L
------------------
BMRN - 485 - 82.13 - (39,833.05) - 80.64 - 39,110.40 - (722.65)
ALXN - 304 - 131.69 - (40,033.76) - 118.40 - 35,993.60 - (4,040.16)
REGN - 96 - 312.86 - (30,034.56) - 306.72 - 29,445.12 - (589.44)
RGNX - 437 - 45.80 - (20,014.60) - 48.81 - 21,329.97 - 1,315.37
GSK - 511 - 39.08 - (19,969.88) - 39.80 - 20,337.80 - 367.92
RARE - 338 - 59.17 - (19,999.46) - 59.94 - 20,259.72 - 260.26
ORCL - 366 - 54.65 - (20,001.90) - 53.26 - 19,493.16 - (508.74)
ODT - 459 - 21.77 - (9,992.43) - 26.15 - 12,002.85 - 2,010.42
CLIN - 795 - 990.5 - (7,874.48) - 1,014 - 8,061.30 - 233.53
AMGN - 58 - 171.85 - (9,967.30) - 175.51 - 10,179.58 - 212.28
SGEN - 148 - 67.64 - (10,010.72) - 70.55 - 10,441.40 - 430.68
BOLD - 259 - 38.58 - (9,992.22) - 39.63 - 10,264.17 - 271.95
ZGNX - 257 - 38.97 - (10,015.29) - 39.01 - 10,025.57 - 10.28
SRPT - 82 - 122.00 - (10,004.00) - 123.90 - 10,159.80 - 155.80
4151 - 542 - 2,030 - (1,100,260) - 2,011 - 1,089,962 - (93.62)
PTCT - 245 - 40.86 - (10,010.70) - 41.89 - 10,263.05 - 252.35
HNSA - 543 - 177.40 - (96,328.20) - 182.30 - 98,988.90 - 295.63
RYTM - 383 - 26.12 - (10,003.96) - 24.54 - 9,398.82 - (605.14)
BIIB - 44 - 229.18 - (10,083.92) - 227.23 - 9,998.12 - (85.80)
UBER - 241 - 41.57 - (10,018.37) - 44.16 - 10,642.56 - 624.19
AMZN - 5 - 1,889.98 - (9,449.90) - 1,804.03 - 9,021.50 - (428.40)
GILD - 151 - 66.36 - (10,020.36) - 65.35 - 9,867.85 - (152.51)
HALO - 640 - 15.61 - (9,990.40) - 15.51 - 9,926.40 - (64.00)
QURE - 168 - 59.31 - (9,964.08) - 75.55 - 12,692.40 - 2,728.32
FOLD - 887 - 11.27 - (9,996.49) - 11.87 - 10,528.69 - 532.20
LJPC - 1,016 - 9.84 - (9,997.44) - 12.86 - 13,065.76 - 3,068.32
VIFN - 71 - 140.50 - (9,975.50) - 140.50 - 9,975.50 - 0.00
UCB - 131 - 68.92 - (9,028.52) - 68.92 - 9,028.52 - 0.00
CRIS - 5,464 - 1.83 - (9,999.12) - 1.43 - 7,813.52 - (2,185.60)
AXGT - 1,189 - 8.41 - (9,999.49) - 4.48 - 5,326.72 - (4,672.77)
GMV: 418,479.55 (42%)
Long P&L -1,379.33

Shorts
----------
MDCO - (616) - 32.44 - 19,983.04 - 37.25 - (22,946.00) - (2,962.96)
VZ - (351) - 56.91 - 19,975.41 - 57.54 - (20,091.24) - (115.83)
CMCSA - (463) - 43.15 - 19,978.45 - 41.48 - (19,205.24) - 773.21
T - (653) - 30.52 - 19,929.56 - 32.49 - (21,215.97) - (1,286.41)
WEED - (314) - 63.69 - 19,998.66 - 56.11 - (17,618.54) - 2,380.12
ACB - (1,776) - 11.26 - 19,997.76 - 10.13 - (17,990.88) - 2,006.88
MRK - (256) - 78.19 - 20,016.64 - 82.46 - (21,109.76) - (1,093.12)
ACAD - (774) - 25.84 - 20,000.16 - 25.84 - (20,000.16) - 0.00
SAGE - (60) - 166.02 - 9,961.20 - 175.84 - (10,550.40) - (589.20)
TLRY - (201) - 49.85 - 10,019.85 - 38.80 - (7,798.80) - 2,221.05
NBIX - (127) - 78.80 - 10,007.60 - 82.41 - (10,466.07) - (458.47)
RETA - (111) - 89.92 - 9,981.12 - 88.50 - (9,823.50) - 157.62
RUBY - (649) - 15.41 - 10,001.09 - 14.16 - (9,189.84) - 811.25
TARO - (95) - 105.66 - 10,037.70 - 90.84 - (8,629.80) - 1,407.90
DIS - (75) - 134.04 - 10,053.00 - 138.04 - (10,353.00) - (300.00)
MRNA - (401) - 24.92 - 9,992.92 - 17.52 - (7,025.52) - 2,967.40
FB - (53) - 188.34 - 9,982.02 - 173.35 - (9,187.55) - 794.47
TEVA - (860) - 11.63 - 10,001.80 - 9.26 - (7,963.60) - 2,038.20
MYL - (509) - 19.64 - 9,996.76 - 17.40 - (8,856.60) - 1,140.16
TSLA - (48) - 204.50 - 9,816.00 - 204.50 - (9,816.00) - 0.00
BA - (28) - 350.64 - 9,817.92 - 353.70 - (9,903.60) - (85.68)
CAT - (81) - 123.39 - 9,994.59 - 124.46 - (10,081.26) - (86.67)
CTAS - (43) - 231.54 - 9,956.22 - 232.62 - (10,002.66) - (46.44)
GE - (1,008) - 9.92 - 9,999.36 - 9.98 - (10,059.84) - (60.48)
HD - (50) - 197.17 - 9,858.50 - 197.30 - (9,865.00) - (6.50)

Gross Short Value: 319,750.83 (32%)
Short P&L: 9,606.50 (+96bps)

Gross Exposure: 74%, Net Exposure: 10%
Total P&L: 8,227.17 (+0.82%)

6/10/19

Biopharma/Investing
--------------------------
  "Never short biologics stocks once they've hit proof-of-concept". That's as good as heurestics come in biotech investing, not because one is indifferent to price (suicidal stupidity), but because new uses are found for biologics all of the time (partially thanks to what has been infinite asset life); at least, so far, and relative to market prices. Remicade withstood the assault of Enbrel, Humira, Cimzia and Simponi (not to mention non-TNFs) despite its IV administration, through dozens of new clinical applications--perhaps half of which made it to the label.
  Look at Soliris--four approved indications and likely more to come. And don't forget the law of expanding markets--more drugs approved in an indication leads to more patients dosed. Eylea and Lucentis have benefitted greatly from that.
  Still not every biologic works out commercially. Zaltrap is one of the rare examples of a flop.
  CD20 is a funny case study relevant to this discussion. Rituxan hasn't stopped growing, and if you include Gazyva and Ocrevus, it is kind of incredible a 22-year old drug/MOA still keeps chugging.
  Surely the plethora of psoriasis/RA/Crohn's drugs with IL-17s like Cosentyx, Taltz and Stelara would damper each other or TNFs? Nope. Markets keep expanding, somehow.
  This brings me to FcRn/IdeS drugs. Here, we have an MOA to reduce IgG a la CD20. MG seems to be the first target. ARGX, ALXN, MNTA, UCB, Immunovant and more have drugs in the clinic. Are we reaching a saturation point in autoimmune drugs? Will this be the first time, ever, that physicians have many options? Across neurology and renal, autoimmune biologics still haven't taken off (with the exception of Ocrevus and MS in general). Will the FcRns sell billions of dollars, each, as niches are found? Argenx has studies in ITP, which I thought was fairly well satisfied. Pemphigus Vulgaris is quite rare, which is fine, as long as you're willing to price high for MG, too. CIDP is quite a bit more interesting, invading the IVIG space. Immunovant is doing its own thing, as is Momenta. ALXN has been close to the vest other than MG plans. What product will have the best profile? Doesn't seem like T1/2=5 hr ARGX will come out on top, despite being first.

Jeremy Levin should probably stick to fixing the car crash that is OVID instead of being Chair of BIO.

Short XON -1%. Can't believe this is still a company. They sell apples, cows, have CART, gene therapy candidates, energy and environmental divisions and were very early in the gene therapy space. Yet AVXS makes one vector and sells for $8B. A good lesson in distraction management.

Papers I've Read
----------------------
Randomized phase 2 study of FcRn antagonist efgartigimod in generalized myasthenia gravis. Howard et al. Neurology 2019.

Personal
------------
Just got the new La Dispute album, Panorama, on the prison mp3 player. Very excited--will write a review. What else should I be listening to?