“JPM2020 The S&P 500, Nasdaq & Apple Soar To New Records” – Vista Partners Daily Market Recap For January 13, 2020

By John F. Heerdink, Jr.

The 38th Annual J.P. Morgan Healthcare Conference kicked off today in San Francisco. It is the largest and most informative healthcare investment symposium in the industry, bringing together industry leaders, emerging fast-growth companies, innovative technology creators, and members of the investment community. It is officially held at Westin St. Francis in San Francisco & brings thousands of investors from around the world together. The hundreds of companies presenting run the gamut, from start-ups to those with more than $300 billion in market cap, and encompass the entire global healthcare landscape, including pharmaceutical firms, healthcare service providers, profit and not-for-profits, and medical device companies.

There are now many other healthcare and biotech events and conferences that are held during the same week that is estimated to bring in approximately +60,000 people from across the world. I met with 12 management teams from biotech companies today and looking forward to digesting the shared knowledge and reporting back to you.

The S&P 500 & Nasdaq closed at record highs today. The S&P 500 ended at 3,288.13, +.70%. 1o of the eleven S&P 500 sectors finished in the green with the materials, +1.4% & the information technology, +1.3% leading the way as Apple (AAPL) soared to a new high of $317.07/share before closing at $316.96/share, +2.14%. The Nasdaq Composite ended at 9,273.93, +1.04%.

The Dow Jones Industrial Average ended at 28,907.05, +.29%.

The Russell 2000 also rose by +.72% ending at 1669.61.

The “fear gauge” Vix (TVIX) ended at $42.16/share, -5.26% and traded in a range of $42 – $44.20.

Markets

Symbol Name Last Price Change % Change

Big Movers

Shares of plant-based burger provider Beyond Meat, Inc. (BYND) jumped +19.02% to close at $114.34/share. The 52-wk range is $45 – $239.71. Recently, it was revealed that McDonald’s (MCD) is expanding its test while ending it with its competitor Impossible Foods.

 

Shares of San Francisco’s Salesforce (CRM) rose to a new all-time high of $184.45/share before closing at $173.85/share, up another +2.03%. RBC Capital Markets recently raised its rating to a “Top Pick” as this monster CRM and acquisition machine continues to grow.

Symbol Name Last Price Change % Change

Bond Markets & US Dollar

Treasuries yields results moved lower today. The 2-yr yield closed up 2 basis points at 1.58% while the 10-yr yield rose 2 basis points to end at 1.85%. The U.S. Dollar Index strengthened to end at 97.36, +.0%.

Symbol Name Last Price Change % Change

Economic Reports

On Monday the Treasury Budget Report for December confirmed a deficit of $13.3B vs. a deficit of $13.5B in the same period a year ago while the over the last 12 months is $1.022T.

Agriculture & Energy

Oil prices closed at $58.12/bbl, -1.5%.

 

Symbol Name Last Price Change % Change

Biotech & Healthcare

The S&P 500 healthcare sector closed at 1193.90, -35%.

The Ishares Nasdaq Biotechnology ETF (IBB) moved higher today closing at $119.16, -1.07%.  The 52-wk range is $96.03 – $123.74.

The NYSE Arca Biotech Index (^BTK) closed at 5,095.04, -2.03%.

Johnson & Johnson (JNJ) closed at $145.70/share, +.44%.

Shares of Atossa Therapeutics,  Inc. (NASDAQ: ATOS) closed at $1.52/share. ATOS recently announced that its corporate name change from “Atossa Genetics Inc.” to “Atossa Therapeutics, Inc.” became effective at 12:01 a.m. ET today, January 6, 2020. The Company’s common stock will continue to trade on the NasdaqCM exchange under the ticker symbol “ATOS.”

“Over the last several years, we have transitioned the Company’s focus on developing therapies to treat breast cancer, breast density and other breast conditions,” said Steve Quay, Ph.D., M.D., president and CEO of Atossa. “Changing our name to Atossa Therapeutics, Inc. more clearly reflects our focus on developing therapies and continues to honor Princess Atossa, the great queen of the Achaemenid Empire, who reigned in the fifth century BCE and who is the earliest recorded woman with breast cancer. She is featured in the The Emperor of All Maladies: A Biography of Cancer, the Pulitzer Prize-winning book by Siddhartha Mukherjee on the history of cancer.”

Recently,  ATOS announced that it has contracted with Stockholm South General Hospital in Sweden to conduct a Phase 2 study of Atossa’s proprietary oral Endoxifen to reduce mammographic breast density (MBD) in women. The study is being led by principal investigator Per Hall, M.D., Ph.D., Head of the Department of Medical Epidemiology and Biostatistics at Karolinska Institutet. MBD is an emerging public health issue, as studies conducted by others have shown that MBD increases the risk of developing breast cancer and that reducing MBD can reduce the incidence of breast cancer. The primary endpoint of the new Phase 2 study is to determine whether oral Endoxifen administration results in an individual change in MBD, which will be measured after three and six months of treatment. The secondary endpoints are safety and tolerability. Assuming the institutional review board (IRB) approves the study, enrollment is expected to open in the first quarter of 2020.

Steve Quay, M.D., Ph.D., President and CEO of Atossa stated, “Atossa’s primary strategic objective is to develop oral Endoxifen to reduce MBD and this Phase 2 study is a major milestone in advancing this objective. Dr. Hall and his clinic are uniquely qualified to lead this study as they recently successfully completed the Phase 2 study of our topical Endoxifen, which demonstrated MBD reduction and they have conducted numerous studies using tamoxifen in both the treatment and prevention setting.”

Maxim Group’s Analyst Jason McCarthy recently issued an update report upgrading ATOS shares to a Buy with a $4/share 12-month price target, stating that the company is “ready to advance its modified-release oral tablet of endoxifen to a P2 study for the treatment of mammographic breast density (MBD).”

INVO Bioscience, Inc. (IVOB) is a medical device company focused on creating alternative treatments for patients diagnosed with infertility and developers of INVOcell®, the world’s only in vivo Intravaginal Culture System, & recently announced that it has entered into commercialization agreements to distribute the revolutionary INVOcell system across many parts of the world including the continent of Africa, covering Nigeria, Uganda, Sudan, and Ethiopia, as well as in Europe (Turkey & Jordan) & the US. Steve Shum (pictured above), Chief Executive Officer of INVO Bioscience, commented recently, “We are excited with the progress being made to drive revenue growth domestically through our U.S. commercialization agreement with Ferring and now in other parts of the world with the recent signing of new commercial distribution agreements for Nigeria, Turkey, Jordan, Uganda, Ethiopia, and Sudan. We believe there is an incredible opportunity to drive the adoption of the INVOcell over the coming years through the creation of commercialization agreements with partners. We will remain diligent to find partners that are incentivized to support the product through minimum purchase requirements or similar arrangements. Our agreement with Ferring for the U.S. and our recent agreements for Africa and Eurasia are great templates to continue working from and we look forward to further agreements announced in the future. Other near-term objectives include the initiation of our follow-on clinical study for the INVOcell device to expand S current label from a 3-day incubation period to a 5-day incubation period. As part of the Ferring agreement, if we achieve 5-day labeling approval from the FDA, we receive an additional $3 million non-dilutive milestone payment. In addition to the milestone payment, the new study will allow us to update our clinical data which we believe will allow us to show improved clinical pregnancy and birth rates and further enhance the value proposition we can provide to the market as an alternative to traditional IVF. Our technology is a simple and more natural solution, with comparable rates of effectiveness to existing options at lower costs, that has been designed to help the millions of couples worldwide that struggle with infertility but are currently unable to receive treatment. We are beginning to put in place the commercialization strategy that can allow for the proliferation of this technology which I believe has the ability to significantly enhance shareholder value.”

Symbol Name Last Price Change % Change

Consumer Goods & Trends

Shares of lululemon athletica (LULU) closed at$ 245.18/share +4.4%.

Shares of Coca-Cola (KO) closed at $56.13/share,+1.08% after being upgraded recently.

Shares of Nike (NKE) closed at $102.16/share, +1.26% today.

Shares of Disney (DIS) closed at $143.88/share, -.51%. Recently, Rosenblatt Securities stated that they expect 20% more Disney+ streaming service subscribers than was expected by the end of Q1 2020 which would mean they could have 25 million subscribers.

Shares of Tesla rose to $524.86/share as Oppenheimer raised their price target to $612/share..

 

Symbol Name Last Price Change % Change

Financials & Fintech

Shares of Goldman Sachs (GS) closed trading at $245.21/share, +1.28%.

Reportedly, American Express  (AXP) ($128.54/share, +.99%) cardholders will have exclusive access to the newly opened two lounges at the Phoenix Sky Harbor International Airport. The 9,500 square feet Centurion Lounge and Escape Lounge opened side-by-side in Terminal 4 are exclusively for American Express Platinum Card and Centurion members offering them more options and premium amenities as they travel through Phoenix. Read the complete story.

Visa (V) closed trading at $195.33/share, +.81%. Recently, Visa and the pan-African fintech leader MFS Africa announced a partnership that will help bridge the gap between the rapidly growing mobile money ecosystem in Africa and the world of online digital payments, significantly expanding Visa’s reach and its ability to open up commerce to the region.

Symbol Name Last Price Change % Change

Materials & Natural Resources

Gold prices closed at $1,5440.90/0z, -.63%.

Silver closed lower at $17.82/oz, -1.01%.

First Majestic Silver (AG) closed at $10.63/share, -3.25%. AG recently hit a new 52-wk high of $12.26/share after reporting their Q3 2019 earnings where CEO Keith Neumeyer highlighted that they added $21.4 M to their treasury during the quarter as a result of strong production from San Dimas and Santa Elana mines.

Hecla Mining Company (HL) closed at $3.05/share, -.97% after reaching a new 52-wk high of $3.51 recently. HL announced this week its preliminary silver and gold production results1 for the fourth quarter and full-year 2019 as well as a significant reduction of net debt and an increase in cash position. The Lucky Friday Union workers have ratified the collective bargaining agreement, reversing the result of the vote held in early December, and many of the workers are expected to return to work.

2019 HL HIGHLIGHTS

  • Silver production of 12.6 million ounces, an increase of 22% and gold production of 272,873 ounces, an increase of 4%. The gold production in 2019 was the highest in Hecla’s history.
  • Silver equivalent production of 47.2 million ounces and gold equivalent production of 549,172 ounces.2
  • Year-end cash and cash equivalents of approximately $62 million.
  • Net debt reduction of approximately $136 million, or 23%, from the net debt high mid-2019.
  • Generated sufficient free cash flow to fully repay the $50 million drawn from the revolving line of credit at the end of the third quarter.
  • Raised approximately $49 million from issuing 21.4 million shares from the At The Market (“ATM”) facility in the fourth quarter.
  • Exchanged $31 million of debt owed to Ressources Québec for 10.7 million shares of common stock and their option to be allocated up to $35 million of a new bond offering.
  • Union workers at Lucky Friday ratified the collective bargaining agreement and many are expected to return to work.

 

“2019 marked a year of higher metal production and in the second half of the year, strong cash flow generation and an improved balance sheet,” said Phillips S. Baker, Jr., Hecla’s President and CEO. “While gold & silver prices have increased, Greens Creek’s record silver production combined with the most gold production in Hecla’s history were the primary reasons for the cash flow strength.”

Symbol Name Last Price Change % Change

Technology & Beyond

The FAANG stocks closed as follows:

  • Facebook (FB) $221/share, +1.77%, after hitting an all-time high of $221.96/share
  • Amazon (AMZN) closed at $1891.30/share, +.43%
  • Apple (AAPL) closed at $316.96/share,+2.14% after hitting an all-time high of $317.073/share
  • Netflix (NFLX) $3338.92/share, +3%
  • Alphabet (GOOG) $1439.233/share, +.66%
Symbol Name Last Price Change % Change

Investing & Inspiration

“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” -Jim Cramer

“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.” -Mark Cuban

Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” -Bruce Kovner

“The policy of being too cautious is the greatest risk of all.” -Jawaharlal Nehru

“The only true test of whether a stock is “cheap” or “high” is not its current price in relation to some former price, no matter how accustomed we may have become to that former price, but whether the company’s fundamentals are significantly more or less favorable than the current financial-community appraisal of that stock.” -Philip Fisher

“I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.” -Richard Dennis

“The four most dangerous words in investing are: ‘this time it’s different.” -Sir John Templeton

“Money doesn’t make you happy. I now have $50 million but I was just as happy when I had $48 million.” -Arnold Schwarzenegger

Symbol Name Last Price Change % Change

Tomorrow

We are due to receive the Employment Situation Report for December & the Wholesale Inventories Report for November tomorrow.

On a trading basis here are 3 ideas in healthcare to check out again today which may become even more interesting if we see a pullback tomorrow as the annual JPMorgan Healthcare conference comes into focus next week.

  • Acorda Therapeutics (ACOR) which closed at $1.96/share recently when we originally highlighted them after they recently announced a $276M exchange of convertible senior debt that moved maturity out to 2024.  Shares of ACOR spiked to $2.77/share last week and closed at $2.42/share today.

 

  • IsoRay, Inc. (ISR) closed at $6888/share today. On November 12th, 2019 ISR reported its record Q1 fiscal 2020 financial results and  CEO Lori Woods said, “These are exciting times for Isoray. We are very pleased by the continued progress we have made and the accelerated growth we have achieved. These results speak to the momentum we are realizing from the strategic direction and changes we have implemented to chart a new course for Isoray. Clearly, the strategies we’ve employed and the steps we have taken to establish Isoray’s leadership role in the prostate brachytherapy industry over the past year are resulting in accelerated organic growth and market share gains. A clear example can be seen in the trailing twelve months where our net new physician customer count increased 26% versus the previous twelve month period. We still have work to do and we will remain focused on our goals for growth and profitability.” Revenue for the first quarter of fiscal 2020 grew 48% to a record $2.32 million versus $1.56 million in the prior year comparable period. The revenue increase was driven by 51% growth in the company’s core prostate brachytherapy business. Prostate brachytherapy represented 90% of total revenue for the first quarter of fiscal 2020 compared to 88% in the prior year comparable period. Non-prostate brachytherapy revenue in the first quarter of fiscal 2020 was comprised primarily of sales to treat brain, gynecological, colorectal, and other cancers. Gross profit as a percentage of revenues increased to 53.4% for the three months ended September 30, 2019, versus 33.5% in the prior year comparable period. First-quarter gross profit increased 136% to $1.24 million versus $0.52 million in the first quarter of fiscal 2019, largely attributed to increased sales and significantly lower isotope unit costs compared to the prior year comparable period, continued leverage of the fixed cost components within costs of sales, and more efficient isotope usage. The lower isotope unit costs are related to the previously discussed supply chain change made at the end of the calendar year 2018.

 

  • Neubase Therapeutics (NBSE) closed trading at $6.57/share last Thursday and expects several data points to be released in the 1st half of 2020 with regard to their gene silencing platform that is initially targeting HD and ALS. Today NBSE closed up again at $7.40/share, +2.78%.

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