Celgene and Partners 2016 outlook

I finally got around to finishing an article on Celgene. My research confirmed my belief that Celgene should at least double by the end of 2020 ("should" means the most likely path, not certainty). Seeking Alpha was kind enough to publish it:

Celgene Catalysts for 2016

One interesting point that I did not belabor in the article is, in addition, investing in the companies Celgene is investing in or partnering with. This is a double-edged sword. Because the companies are much smaller and are development-stage companies, the potential return, if they are successful in getting FDA approvals for their therapies, are much larger than Celgene's. Against that weigh that they mostly already have significant market capitalizations, so they are valued as if there is some certainty of some degree of success. (Probability of approval, times potential earnings per year, times a potential P/E ratio, should equal market cap).

So Celgene is likely to rise at least gradually because of ramping sales of currently approved products, plus any pipeline approvals. But the partners could fall dramatically if their therapies fail to show clinical results that warrant FDA approvals. And that could happen any time.

One of the main investment themes for me in 2015 was researching these Celgene partnerships and investing in a few of them. Because I was not in a hurry I was able to buy them during the Hillary Dip. Do your research and keep in mind the risks before buying at any price. But here are the ones I added to my portfolio:

Acceleron (XLRN)
Agios (AGIO)
Epizyme (EPZM)
Juno Therapeutics (JUNO)

To see all my biotechnology positions, with links to my notes on the stocks, try:

William Meyers Biotechnology Picks

This weekend I hope to write up an analysis of how my portfolio did in 2015. Right now it looks like about 16% to 17%, but I won't know exactly until the market closes. I'm going to submit my analysis to Seeking Alpha. If they don't publish it, I'll post it here.

Happy New Year!

William P. Meyers

Alnylam, Celsion, Protalix, and Agios Pharmaceuticals

"Its been a long time, been a long time, been a long time ..."

Yesterday Seeking Alpha published my latest research and opinion on Alnylam (ALNY):

Why Alnylam Should Be a Big Mover in 2016

I first bought Alnylam on October 6, 2015 at $75.13. As I write it is at $100.57. I have followed Alnylam for some time, so that run up is not a display of genius. I took advantage of the Hillary Clinton biotech swoon to buy ALNY at a reduced price. As I note in the article, Alnylam is priced as if it already has commercial revenue and profits, when in fact it is a developmental stage company. Failure of its drug candidates in trials could made $75 per share look ridiculously high. But its platform can generate many therapies, making it a possible tenner if you can wait a decade.

What else have I bought since I last wrote?

Acceleron (XLRN) at $22.48 on October 14, 2015
Celsion (CLSN) at $1.81 on November 16, 2015
Protalix (PLX) at $1.05 on November 18, 2015
Star Bulk (SBLK) at $0.98 on November 20, 2015
Agios (AGIO) at $50.31 on December 7, 2015.

The only sale I made during the period was Ocata (OCAT), and that is because it was being acquired anyway. I bought OCAT at $5.12 in July and at $3.84 in August. I meant it as another long-term investment. I sold it at $8.48 on December 2, a bit below the buy-out price of $8.50.

My purchases listed above were small even by my standards, mainly just reinvesting the Ocata funds.

The bulk of my portfolio remains in the larger companies: Gilead, Celgene, Biogen, Amgen, and Mylan.

I continue to believe that, for long-term investors, most biotechnology stocks are underpriced right now. While I agree that some government regulation of the most predatory companies may be appropriate, and might even happen, I believe that innovative companies that create therapies valuable to patients should continue to be able to provide better-than-market returns to investors. I believe during patent protection periods pricing should be up to the patent holders. Of course if Medicare or Medicaid feel those prices are too high, they should be able to refuse to pay for the patent-protected therapies, or negotiate a mutually agreeable price.

Even in a Hillary Clinton administration with Democratic majorities in Congress, I believe there is little chance that the current system will undergo anything other than minor tweaks.

Positions Update; bought Alnylam Pharmaceuticals

The biotech meltdown has continued since my last post, mostly due to downgrades of certain stocks, but in the case of Illumina (ILMN), because of an earnings pre-announcement today. I did not buy, but ILMN is getting to a tempting level.

I've been buying selectively, but looked at my Openicon positions page today and noted it is sadly out of date. So I fixed it up. Click on the link and you can see what I currently own with further links to my notes and Seeking Alpha articles.

My only new company is Alnylam Pharmaceuticals (ALNY) which I bought today for $75.13 per share. This is a mostly early-clinical stage company working with RNAi therapy. I've been watching it some time, but too much profit was built into the stock price for me. It could still go lower, especially if negative clinical results come in, but I was comfortable, even pleased, at the price I bought at. It is a stock for investors with a 3 to 10 year time horizon.

I also added to three positions I already had, again because the price was right by my lights:

Gilead Sciences (GILD) on September 28

Mylan (MYL) on September 28

Merrimack (MACK) on October 1.

I am looking forward to Q3 earnings calls.

Just my luck: the Hillary Clinton biotechnology meltdown

Before looking at the biotechnology meltdown, I'll review my trades since my last report on September 12:

I sold my few shares of Adept Technology (ADEP) because it is being bought out by a Japanese company for $13.00 per share; I took $12.93 rather than wait. I had bought the shares in May for $5.92 per share, so no complaints except that if I had had a crystal ball I would have bought a lot more shares and probably some options too.

With my vast wealth I bought small amounts of:

Medivation (MDVN) at $50.66 per share

Juno Therapeutics (JUNO) at $37.36 per share

and added to my Agenus Bio (AGEN) position for $5.44 per share.

Medivation and Agenus are already down substantially, but Juno is up a notch. I'm not worried, they were all bargains at the prices I paid and I'll be laughing at the panicky sellers in a couple of years. Agenus in particular has an amazing platform that is going to wow people in 2016 and 2017.

Lots of tempting stuff by the end of the day, especially the companies that are already profitable and not dependent on clinical trial results or FDA approval.

Gilead (GILD) is ridiculously undervalued. Cash from operations will continue to flow in, as we'll see when Q3 is reported, and they will continue to buy back stock (as well as pay a nice dividend). It is the opportunity of a lifetime. Don't say no one told you so. Based on trailing earnings GILD is trading at a P/E of 11.4, which means earnings are 8.8% per year and growing. The Hepatitis C cash will keep rolling in as more nations in Europe and elsewhere approve reimbursements.

Presidential candidate Hillary Clinton I'm sure has good intent, and yes, sometimes pharmaceutical companies gouge their customers. But she is complaining when the Orphan Drug laws are doing exactly what they were supposed to do: encourage companies to develop new drugs, which after their patents expire will go generic.

Could the market use some regulation? Perhaps, but I think that except in a few cases the payers and patients can simply not pay prices they think are unfair. Take Gilead's Harvoni. If there are cheaper alternatives (taking into account effectiveness and the cost of side effects), consumers would choose them. But Harvoni is priced fairly compared to prior, less effective treatments with worse side effects. Even the strict European regulators think Harvoni is worth the cost. I doubt Gilead has anything to fear from Hillary Clinton.

This is especially true when you look at political reality. Given the boost that biotech firms give the economies of California and Massachusetts, their congressional delegations are not going to support draconian legislation. Neither are most republicans. Any actual signed legislation will be to make the public feel good while having little impact on most of the drugs most companies sell.

The smartest thing Hillary Clinton (or whomever becomes President) could do for health care would be to use government funds to accelerate the eradication of Hepatitis C (and B) because that would eventually mean no new cases, which would be a great savings to individuals, insurance companies, and Medicare.

Juno Therapeutics

When I sat down to write about Juno Therapeutics (JUNO) I thought it would take me about two hours. Instead I found it took about 8 hours, spread over a couple of weeks. Juno has the poorest web presentation of data of any biotechnology company I can remembering researching. Add to that that it has a number of therapies in Phase 1, each with poorly presented data, and the novelty of their platform (CAR-T) to me, and it was a struggle. You can read what I wrote at Seeking Alpha:

Juno Therapeutics: Celgene Partnership And CAR-T Pipeline Value

So far I have not bought any Juno stock, but I do own Celgene (CELG), which now owns a substantial amount of JUNO.

I last updated this blog on August 25. Since then I added to three of my positions, but nothing since 9/3/2015:

OCAT

SGEN

MCHP

You can find my basic analysis of Seattle Genetics and Microchip at Openicon and at Seeking Alpha. I haven't written about Ocata Therapeutics yet, but others have written about it at Seeking Alpha, and I'll get to it some day. September is a very busy month for me, so it is not actually on the schedule yet. Another stock I will write about soon is Agios (AGIO), which is another Celgene partner. I don't own any Agios at this time, but would be considering buying it at the time I do the research for the article.

My investment portfolio is so small that my buying or selling stock generally only affects the price for a few milliseconds.

Cashing in Dot HIll,Cantel Medical, Buying Biotechs

I did not foresee the China mini-crisis. But I watched with fascination. Because I had little cash in my account, on August 12 I raised cash by selling my Cantel Medical (CMN) stock, all of it. Cantel is a great company making infection control devices. When I bought it in December of 2009 for $19.58 per share, after hearing about it at Seeking Alpha, it seemed undervalued to me. Since then it split 3 for 2 twice, and when I sold it I got $54.02 per share. No complaints there, it is just a valuation call.

Before I could reinvest that money, Seagate (STX) announced it would buy Dot Hill (HILL). Rather than wait for the transaction to close I sold my HILL at $9.685 per share on August 19. I first bought HILL in 2004 for $7.18 per share. That sounds less than brilliant, but I became a specialist in HILL, mostly selling high and buying low. It has been a very volatile stock. Most of the stock I sold in the end had been bought at $1.00 to $1.40 per share, though I had bought more at $5.67 as late as July 7.

I generally am a careful buyer, doing my homework before buying. But what a sale we have had! An opportunity to buy stocks I wanted, or wanted more of, at better prices.

So this is what I bought:

Star Bulk (SBLK) at $2.39. This is not a biotech.

Epizyme (EPZM) at $15.60.

Gilead (GILD) at $109.18

Amgen (AMGN) at $151.45

GlycoMimetics (GLYC) at $6.84

Inovio (INO) at $6.71

You can read what I think about each of these stocks by checking out William Meyers at Seeking Alpha.

An even higher level of detail is available at my site, openicon.com.

Unfortunately I missed the super Door Busters sale of the opening minutes of Monday the 24th. It is a sort of vacation like week for me and I thought the market would open low and then drift lower during the day. Oh well. I still have quite a bit of the HILL cash and will try to invest it carefully in biotechs, but before they start shooting up too high again.

Keep diversified!

Rough Days and Inovio

I continue to think that Inovio (INO) is one of the great biotechnology stories of our era. I have a new article out at Seeking Alpha on it:

Why Inovio Surged 26% on August 9

I just looked at my calendar and realize that should be August 10! Pretty funny!

Let me quote Dr. Kim: "We already have, and expect to soon show, many further accomplishments and advancements." When I interviewed him in July he made similar statements. The rules of biotech are that you have to announce that the data will be presented in a journal or at a medical conference. But the data is accumulating.

Like most of the stock market, Inovio sold off on August 11 and so far today. It's August, many of the big players are on vacation, and the Chinese have created uncertainty. Since most of the biotech companies sell most of their therapies in the U.S. and Europe, I am not worried. If the yuan were allowed to float, it would have floated down.

Of more concern is insurance companies, instead of doctors, deciding what drugs patients will be treated with. I know some doctors are greedy to the point of being con artists, but most try hard to get the specific drug to a specific patient with specific circumstances. It makes no long term sense to deny patients Hepatitis C therapies until they suffer detectable liver damage. It makes no sense for insurance clerks to decide what MS treatment is best for patients. Insurance companies have a legitimate right to monitor doctors to make sure they are not running up fraudulent bills, but denying patients the meds they need is criminal and should result in punitive measures by the courts.

On the other hand, some of the biotechs that I thought were too pricy just back in July have snapped back towards reality. My latest buy was Epizyme (EPZM), and while almost all my cash is at work, I am thinking of picking up some more small cap and mid cap biotechs during this fire sale.

Buying flurry: Dot Hill, Star Bulk, Ocata Therapeutics, Acceleron, Biogen

It is earnings season so I am very busy, so I am behind in updating followers on my trades.

If you want to read the notes I make on the analyst conferences of the stocks I follow, you can find a list of the stocks with links at: Meyers Analyst Conference List

I only sold once stock lately, a bit of my Celgene (CELG) stock, because I had bought some extra when it dipped and then it went back up and exceeded my portfolio limit rules. My last two trades were buying on April 30, 2015 at $107.20 and then selling the same amount on July 15, 2015 for $132.99. Of course Celgene has risen since then, so I am fairly near my portfolio limit of 10% of any stock for Celgene. Check out Seeking Alpha for my Celgene articles.

I also added shares of Dot Hill (HILL) to my existing holdings at $6.28 on June 26, 2015 and at $5.67 on July 7, 2015. Dot Hill continues to do well with sales of its data storage systems and so I would not be surprised at another record year and the stock heading to $8.

I bought some Star Bulk (SBLK) on July 16, 2015 for $2.99 because if the global economy revives a bit the demand for bulk shipping will too, and freight rates will hopefully come off their recent lows and reach levels that are profitable for shippers. It is off the beaten path for me and a risky investment because if rates stay low, it will continue to operate in the red.

On July 17, 2015 I bought an initial, tiny, position in Ocata Therapeutics (OCAT) pending further research.

On July 21, 2015 I bought an initial position in Acceleron (XLRN) because I was doing research for my article Accleron Has Two Potential Blockbusters for Seeking Alpha and I liked what I saw. Acceleron has a partnership with Celgene.

And finally, since I was quite cynical earlier in the year about Biogen's (BIIB) Alzheimer's early data, the updated data gave me a favorable impression. I have owned BIIB since 2009 or so, but well below my portfolio limit due to its high P/E ratio. So I bought more BIIB on July 24, 2015 for $306.96. True, by the end of the day it had fallen a bit lower, but consider that its 52-week high had been $480.18 back on March 20, 2015. Really, not that much has changed since March, it shows you how dependent day-to-day auction prices are on emotion.

My general strategy is that I am a long-term investor. I may sell a stock when it had done so well that it exceeds my portfolio limits, or when I have other reason to think it has become so over valued it is no longer a good long-term investment.

Keep diversified!

Intel (INTC) Q2 summary and analysis

You can view my notes on the Intel (INTC) Q2 2015 results and analyst conference held earlier today as a supplement to this analysis. I don't own INTC and it is no longer my investment style, but I've been interested in computing for decades and follow Intel's doings with interest.

First order, Intel is seeing declining y/y revenue. In the quarter revenue was down 5% from year-earlier, to $13.2 billion. Most of this revenue decline was for PC (desktop, notebook, and mobile) chips. The datacenter group had revenue up 10% y/y as computing continued to migrate to the cloud.

Despite the decline Intel is highly profitable. In many cases its chips get little or no competition from AMD, the only other x86 architecture chip company. Net income was $2.7 billion, leading to EPS of $0.55, which was flat y/y.

Guidance was for a seasonal Q3, which means revenue up about 8%.

Intel is still doing its best to enter the mobile phone and tablet market, but is still losing money at that. It is also behind in technology. It is finally sampling a 4G phone chip. I don't see Intel ever being competitive in phones, but they are acting competitive, so I could be wrong. No other chip company could lose so much money just trying to get a toehold in a crowded, highly competitive space.

Intel also indicated there will be a delay in shrinking transistors to 10 nm. That might help AMD, but given that AMD is still stuck at 28 nm, it won't help much unless AMD announces 16 nm chips sooner rather than later. Given AMD's history, my guess would be later.

I see Intel as a dividend stock, not a growth stock. It is true the acquisition of specialty chip maker Altera (ALTR) will give Intel a revenue and profit boost when it is finalized, but I think Intel management is just as likely to screw up Altera as to give it a leg up on its traditional rival Xilinx (XLNX).

Before results were announced Intel closed at $29.69. At that price the dividend currently works out to 3.23%, which is pretty good. It might not look so good if the Federal Reserve even raised interest rates significantly.

Disclosure: I don't own INTC or ALTR. I do own AMD and XLNX.

Keep diversified!

United Therapeutics and GlycoMimetics

Going down the list of stocks in the IBB, my next stop was United Therapeutics (UTHR). I spent about a day doing research and wrote up my conclusions for Seeking Alpha:

United Therapeutics Appears Undervalued

I concluded I did not want to buy UTHR at the present time. Buying it a year ago would have been smart, but then a lot of biotech pharmaceutical companies are up a lot in the last year. Other investors may find it worthwhile. I concluded it was undervalued, which for most investors would make it a buy, but I just did not like the pipeline enough. Maybe later.

GlycoMimetics (GLYC) announced that its partner Pfizer had initiated the Phase 3 trial of Rivipansel for the treatment of vaso-occlusive crisis (VOC) in patients hospitalized with sickle cell disease. That triggered a $20 million milestone payment. If you read this blog you may recall that I bought some GLYC back in March and April because the price seemed low because of a delay in getting the trial started. I bought at $8.59 and $8.36. Well the stock popped on the news today, up $0.95 to $8.79, so I am up only a tad. However, if the trial gets good results this is going to be a big winner, since the current market cap is only $167 million. Could go 10x or 100x in the next decade. On the other hand it is a micro-cap. Bad results in this trial could be a death sentence. Pick your poison.

All the more reason to:

Keep diversified.

Of course if you want to read the detailed notes I keep on stocks I own or am thinking of acquiring you can find a list at OpenIcon.

Inovio Interview, AMD Buy

I spoke at length to Dr. Joseph Kim, CEO of Inovio (INO) on Friday the 12th, about dMAb (DNA monoclonal antibody) technology.

dMAb showed promise in mice and is about to enter its first human tests. Note that Inovio has several clinical trials completed for its DNA vaccines, and may advance to its first Phase 3 trial later this year.

You can find my explanation of dMAb and its potential at Seeking Alpha:

Inovio's dMAb Technology [June 17, 2015]

I am hoping to resume my extension of coverage to more biotechnology companies by working my way through the IBB holdings, but I cannot promise when the next report will appear. Follow me at Seeking Alpha or here to keep up.

After watching AMD's presentation yesterday of its new graphics cards I considerably enlarged my AMD holdings. I like the new memory technology, but I do wish they had gone ahead and jumped to 20 nm or 16 nm technology. AMD looks cheap right now, but it could go down further short term because Q2 results are likely to be pretty bad. However, with the introduction of Windows 10 and the new graphics cards and the usual back-to-school and run up to the holidays, I expect Q3 will make AMD look a lot better. We won't know, of course, until October.

Keep in mind that I don't recommend stocks. One thing I do is technology journalism, and I disclose my own investing so readers can know what biases I might have. (I own Inovio too).

Keep diversified!

Marvell Technology FLC story

Marvell Technology: Can FLC Return It to Growth? [June 2, 2015, Seeking Alpha]

This may be a "Boy who cried wolf" story. FLC (final-level cache) may be the next big thing in computers, or at least increase Marvell (MRVL) market share for controller chips by 25% of more, but I just can't get excited about it at this point.

Still, Marvell and its FLC technology are worth watching. I like to think long-term, but Marvell's poor performance over the past decade is one of the reasons I have shifted my portfolio to mostly biotechnology stocks.

Writing about Dot Hill and Nimble Storage

I originally studied Dot Hill (HILL) when I was asked to report on Crossroads (CRDS) back around 2002. I was looking for comparisons in the data storage markets. I bought some Dot Hill and have owned it ever since, but traded in and out of it more than most of my stocks.

When I saw a press release about a comparison of Nimble Storage (NMBL) and Dot Hill products I was already planning to write an update on Dot Hill for Seeking Alpha. Dot Hill has been one of my best performing stocks because I bought most of what I own at between $1 and $2 per share and it is now over $7.

The result was:

Dot Hill and Nimble Storage: Comparing Growth and Risk

I have long found it interesting how stocks pushed by the larger Wall Street banks/brokerages can carry higher valuations than otherwise similar companies. Also how a good story about future profits can clash with actual returns when the future arrives. This story fits both criteria, but has a positive ending, since Nimble will probably grow into its current market valuation over the next 2 to 3 years. The firms that helped it with its recent IPO will continue to advise their clients to buy it, so you cannot count on a dip in price between now and whenever actual profits get to the point of justifying the stock price.

If demand for data storage slows or is disrupted, of course both Dot Hill and Nimble will suffer. But right now they look like growth stories within the storage equipment market.

Writing about Agenus and Celgene

I had an article published by Seeking Alpha:

Why Agenus Can Continue to Rise After Doubling

In the article I said Agenus (AGEN) could be up 20x in about 5 years.

That, of course, is the kind of prediction that can get an analyst or financial writer in trouble. So I thought of how I might make a less outrageous claim (especially considering that I own Agenus, and so could have a bias).

But then I thought about Celgene (CELG). I did an analysis of where I thought Celgene should go back in January of 2014. I pulled back from the top end my analysis, and wrote an article intended for Seeking Alpha. The editors asked for revisions that I thought were unnecessary, and I was very busy right at that moment, so I did not revise it, did not get paid for it, and sent it to what they call their Instablog. I also reposted it here:

Celgene in 2017: $375 per share or more [January 14, 2014]

And I went on with life. But when I had more free time I looked at my Celgene analysis again, and figured I was almost certainly right. To make my article seem less outrageous, I pulled in the timeline and lowered my estimate. I had also learned a bit more about what Seeking Alpha editors want. So they published it:

Celgene in 2015: $200 per share [April 29, 2014]

Now if you look at Celgene's stock price, you would see it closed Friday at $115.53. You might say, "That rascal William Meyers was hyping Celgene, but he missed by a mile." Except that Celgene split two for one in June 2014.

Adjusting for the split, my headlines would read:

Celgene in 2017: $187.50 per share or more

Celgene in 2015: $100 per share.

In other words, by catering to the believable, I actually under-predicted 2015 by quite a bit. There is a ways to go to hit my 2017 Celgene projection, but I am more confident in it now than I was when the article was originally written.

Of course I could still be wrong about Agenus, though in my article I did set out a bunch of milestones Agenus would have to hit in 5 years to go up by a factor of 20x.

I own Celgene and Agenus stock. Despite my prediction about Agenus, I am not selling everything else and buying it, or mortgaging my home, or anything like that. Things can go wrong, and that is why I always tell my friends:

Keep diversified!

Acceleration Wars: Intel, Nvidia, Xilinx And Altera

A whole bunch of companies I cover reported last week. You can find my notes on their analyst conferences at www.openicon.com

I had an article published at Seeking Alpha too:

Acceleration Wars: Intel, Nvidia, Xilinx And Altera

I should also note I added to my Inovio (INO) holdings today. This is a long-term investment. Inovio is not likely to have a product on the market before 2018. In the meantime it has a decent amount of cash and may receive more from milestone payments from its research partnerships.

I hope to start catching up with my thoughts on the company's I write about for Seeking Alpha this week, based on their recent analyst conferences.

Sold Some Dot Hill

This morning I reluctantly sold 10% of my (tiny) Dot Hill (HILL) holdings. This was because Dot Hill had become well over 10% of my portfolio by value, breaking my portfolio rule. Even after the sale Dot Hill is somewhat more than 10% of my portfolio, but it is looking to be on a roll. So enough for now.

Dot Hill will report Q1 results tomorrow. I'll be looking for guidance. If Q2 is predicted strong then the rest of the year should be great.

The shares I sold today for $6.85 I bought for $1.74 on February 4, 2010, but I originally invested in Dot Hill back in 2005. It was up and down for a while, but now it looks like we are mostly going up.

I will likely write an article for Seeking Alpha on Dot Hill soon. You can see links to everything I have written on Dot Hill, including my notes on analyst conferences I took over the years, at

William Meyers Dot Hill page

I Buy Adept Technology, again

I just bought a small amount of Adept Technology (ADEP) at $5.92 a share. I'll be watching to see if future developments warrant further investment.

Adept Technology is a small cap company that makes industrial robots. It has been around for quite a while. I like robots. This is my second go round with Adept. Despite my trying to be a long-term investor, and my shifting to biotechnology stocks, I bailed out of ADEP once already, and with good reason. If you do decide you like ADEP, be wary.

I originally bought Adept in 2012, when it was in deep trouble due to falling sales. I bought at $3.95 on 11/5/2012 and then at $2.94 on 11/09/2012. My final purchase was for $3.34 on 2/8/2013.

It was a turn around bet, and after Adept hit bottom some small brokerages started recommending it. The stock rose faster than its revenue, and so I started selling. I sold at $7.92 on 10/7/2013, then at $14.45 on 12/26/2013, and the remainder at $18.63 on 2/10/ 2014. The stock went even higher than that, but neither sales nor profits justified the high prices, to me.

Of course eventually the stock price stalled and started falling. I continued to cover Adept at OpenIcon. You can read my notes about the Adept Technology March 2015 quarter results and analyst conference.

My reasoning for today's purchase is that the current market cap is about $80 million. In March revenue was $14.1 million, and June quarter guidance is for revenue between $13.5 and $15.0 million. Margins are not great, so they are losing money, but could hit profitability on a bit more revenue.

But feedback on their mobile robots (for warehouses, etc.) is good, and they expect to sell significantly more as the year progresses, though perhaps in a lumpy manner.

My rule of thumb for P/E is 20. So they need $4 million per year, or $1 million per quarter, to justify the current price. I think Adept could reach $1 million profit per quarter by the end of the year. They could also fail for a variety of reasons, including less than expected sales of their old-line, assembly-line robots, or of the new mobile robots.

Again, I hope that Adept succeeds gradually, and the stock price just goes up to reflect the level of success. So I can be a happy, long term investor, rather than having to sell after concluding that the stock price has been pumped up beyond reason.

Especially when investing in micro-cap stocks it really pays to

Keep Diversified!

I buy some Celgene

I took advantage of today's sale to increase my Celgene (CELG) stake by 12.5%, buying at $107.20.

My last prior trade in Celgene was selling 20% of my stake at $118.59 on December 8, 2014, mainly because I had reached my portfolio limit as the price increased.

I first invested in Celgene on May 4, 2009.

Celgene released results today. You can look at my Celgene Q1 analyst conference notes.

I think the company is doing fine, it stuck to 2015 guidance, and anyone buying today at any reasonable price will be very happy come 2017, if not sooner. The potential of Revlimid sales is astonishing, and the pipeline is very, very impressive.

My trades are way to small to influence the market price for more than a millisecond, especially on large cap stocks like Celgene.

Almost Bought Alnylam Pharmaceuticals

As I continued my quest to research most of the Biotechnology companies, starting with those in the IBB, I got to Alnylam (ALNY) over a week ago. Then earnings season got underway, and it took me some time to finish up the research and write my opinion, which you can find at:

Is Alnylam In 2020 Worth $9 Billion Now?

I concluded I should buy some ALNY, though there is considerable risk due to the high market capitalization for a development-stage company, as high or higher as some companies with products already approved by the FDA and generating income.

Biotechnology stocks sold off on Monday, and when I looked at Alnylam this morning, after Seeking Alpha published my article it was further down, well below where it was when I started my research (at which time the market cap was $10 billion).

I decided to buy, but did not actually hit the button. After all, I have limited cash, and what goes to ALNY can't go to something else. In particular Seattle Genetics (SGEN) is reporting Q1 results on Thursday. I own a little bit of SGEN, and would like more. And then there others ...

So I'm going to try to not hit the Buy button until earnings season is over and I can make a rational decision about where to put cash to use, or to hold it.

I don't believe that biotechnology stocks are over priced in general, but it has gotten harder these last few years to find undervalued ones. I do occasionally sell parts of my positions when I think a particular stock has gotten frothy, and also when a stock has done so well that it has become too big of a part of my portfolio. That is where the cash comes from.

Biotechnology is perfect for buy and hold. In the longer run most of this class of company will turn pipelines into commercial therapies, and money. In the short run they can fluctuate drastically. When the Fed or Goldman or whoever screams sell, I usually wait until I like the prices, and then I buy. But not today.

Intuitive Surgical, Alexion, Agenus and Amgen

Busy week, lots of companies I follow reported earnings and had their analyst conferences.

I was able to write only one new article for Seeking Alpha:

Intuitive Surgical Returns to Growth, Sort of

ISRG is getting its footing back, but I wonder if it can ever get back to being a high-growth biotechnology company. It is no longer building on a small base, and its sales seem to be constrained by the capital equipment budgets of national health systems and U.S. private hospital chains. It could benefit if the European economy finally picks up. Lots of cash at Intuitive, maybe it is time to pay a dividend?

Alexion Pharmaceuticals (see Alexion Q1 2015 analyst call notes) still might seem overpriced to the traditional investor, but I can see the future pipeline, and it is river of profits.

Agenus is one of the new kids on the block. This year it should see first revenues from one or two vaccines it has a component in. It has a bunch of partnerships with larger pharmaceutical companies. It is a stock for investors who are patient: the big money may be three to five years away. But with a market capitalization of roughly a half billion, and the five year market cap likely to be more like 10 billion (if more things go right than wrong), who can complain about waiting 5 years for their money to 20X? See Agenus Q1 2015 analyst call notes

Finally we have Amgen, the Old Boy of the biotechnology crowd, but recently renewed by focusing on the future pipeline. Safe, pays a dividend, and has strong growth potential, if you are a beginner Amgen Should be the Cornerstone of your Biotechnology portfolio. See also my Amgen Q1 2015 notes

Hope your week was as good as mine!

Keep diversified!

Q1 Earnings: Seagate, Amgen, Intuitive Surgical, Illumina

It's a busy time, and I'm behind!

New from me at Seeking Alpha: Seagate Likely to Underperform. But if you want an IT tech stock dividend, it does not get much better than STX.

I don't own Seagate anymore. I do own Amgen (AMGN), and things look good there, as you can see from my notes on the Amgen Q1 2015 analyst conference.

Illumina (ILMN) is doing well as a business, but doing well seems to be priced in already; high P/Es always bring the danger that something will go wrong. See Illumina Q1 2015 analyst conference.

Next I am planning to listen to the Intuitive Surgical (ISRG) conference, which took place yesterday afternoon, so likely by the time you try this link will have my full notes: Intuitive Surgical Q1 2015 analyst call.

So far earnings season has been pretty good for me. Hopefully for you too.

Keep Diversified!

Intel Q1 2015

You can read my appraisal of Intel at Seeking Alpha:

Intel Q1 was a Dinosaur Egg

You can also see my notes on the Intel Q1 2015 analyst conference.

It's interesting how at Seeking Alpha my most profitable articles tend to get ignored, but if I write about a company like Intel I get far more page views (Seeking Alpha pays me by the page view). Just for instance, anyone who has been following my series on Dot Hill (See my main Dot Hill page for links) and taken a chance buying HILL has done far better than anyone who has invested in Intel (INTC) lately. Of course, I do a lot of educated guessing, so I do guess wrong once in a while. So be careful, think for yourself, and

Keep Diversified!

Biotechnology: Medivation, Opexa

Playing catch up, and with Intel reporting today I'll start listening to analyst conferences and putting up notes at www.openicon.com, though I would advise if you are really interested in investing in stocks, that you take the time to listen to the conferences yourself (links are available on the investor web page for each company). On my agenda are AMD reporting on Thursday, Intuitive Surgical and Amgen next Tuesday, then a whole slew of technology and biotechnology companies.

I had another article published at Seeking Alpha:

Medivation Looks Strong For 2015-2016

While I am positive on Medivation, I have not bought any yet. With limited cash and a whole bunch more biotechnology stocks to research, I am holding my fire.

I did add significantly to my Opexa (OPXA) position last week. This is an investigational stage company that has had trouble raising cash. I bought at $0.50 and it is already down to $0.45. Oh well, I think they have enough cash to last until Phase 2 data for their multiple sclerosis treatment comes in 2016. If the results are positive, they will have to raise more cash, but the stock should be up quite nicely. Highly risky. Don't say I didn't tell you so. Most of my money is in safer biotechs, notably Gilead.

Keep diversified!

Jazz Pharmaceuticals, Glycomimetics

As I continue to spade through the IBB, looking for something that will help my portfolio continue to outperform the IBB, my latest report:

Jazz Pharmaceuticals Could Be A Buy, Depending on Your Investment Strategy

I don't own JAZZ, but have added it to my watch list.

Last week I bought an initial small position in a highly speculative micro-cap, Glycomimetics (GLYC). It is down a bit since I bought it. It had its IPO in 2014, then ran into a delay by its partner Pfizer in the initiation of a Phase III trial for its leading candidate, Rivipansel. I expect the stock to catch a bounce if patient enrollment in the trial is announced. If Pfizer backs out, it will likely go significantly lower. I am not recommending GLYC to anyone, but I may start publishing research on it (time permitting). I will likely buy more over time opportunistically, if facts warrant that.

I am very much looking forward to earnings season kicking off this month. My big question is: how did Gilead (GILD) do? You can find my reports on quarter results and analyst conferences at: www.openicon.com/confsums/listcos.html

Biotechnology Weekly Review: Pharmacyclics, Biomarin, Incyte

What a week!

People who make their money getting investors to trade as often as possible declared that all biotechnology companies are overpriced. Brokers indeed made money as biotechnology sold off.

Even Gilead (GILD) sold off. Which is ridiculous, as Gilead is possibly the most undervalued large capitalization stock on the market right now.

I had been working on the following article for a while, which was published by Seeking Alpha on March 26, 2015:

Pharmacyclics, Biomarin, and Incyte, A Quick Screen

By the time it was published the stocks were all down a few percent from when I started. My basic conclusion was that all are good companies for investors with a long-term view, but at least the results of the next 2 to 3 years from their pipelines is already represented in current market caps.

But hey, if you want a run up a stock, or make money on the brokerage fees when people trade on a rumor, just announce that you think a small company may be acquired by a larger company.

Yes, that happened to Biomarin this week. It could happen to any stock, why not Biomarin? The problem is the price. Only a CEO with a very long term outlook would buy Biomarin at the current price. There are better bargains out there. I know if I wanted to develop orphan drugs based on enzyme replacement therapies like Biomarin does, I would look to license technology, rather than buy the whole company.

Note that the reason I don't just buy more Gilead is that it has already over my portfolio limit rules for a single stock. That is what is forcing me to screen smaller companies to find things to buy.

I am also at or near my portfolio limit for Celgene and Biogen (formerly Biogen Idec), and recent buying of Mylan plus the price rise has put me at a point where I won't be buying more Mylan unless the price dips for no good reason.

I'll be continuing the series soon. You can follow it here or at Seeking Alpha.

TTM Technologies (TTMI) sold, will no longer cover

TTM Technologies (TTMI) makes printed circuit boards (PCBs) for the electronics industry. It is in the process of acquiring a rival, Viasystems. I first bought TTMI on February 19, 2018 for $11.03 per share. I bought more on March 30, 2010 for $8.98 per share, and a final, equal amount on December 17, 2013 for 2013.

I sold all my shares this morning for $9.075 per share, so I have a small loss overall.

When I bought TTMI my portfolio was almost all IT and semiconductor stocks. But I had begun my shift to biotechnology stocks. Now most of my portfolio is biotechnology, which is why the portfolio as a whole is up 5x what it was in 2008.

I will no longer take notes on TTMI analyst conferences. You can see my old notes, blogs, and Seeking Alpha articles at TTM Technologies notes by William P. Meyers.

I would note I think TTM is a good company with good management, but it is in a tough industry with low margins where customers like Apple really squeeze prices down. I wanted more cash in my portfolio, in case the market turns down or I find another biotech stock I want to acquire. No reason for anyone else to panic.

The remaining non-biotech stocks in my portfolio are Applied Materials (AMAT), AMD (AMD), Dot Hill (HILL), Microchip (MCHP), Marvell (MRVL), and Xilinx (XLNX). Of those all pay dividends except Dot Hill and AMD. Dot Hill has great prospects. AMD I am not so sure of. If I have a pet stock it is AMD. I am hoping Lisa Su will perform wonders there.

This post is not financial advice. Since I write about my investments and investment ideas, I like to keep readers informed of my decisions. Here is a full list of my current positions.

Amgen, Mylan and Biosimilars

Biosimilars are a big topic among investors in pharmaceutical companies. Biosimilars have been in use in Europe for some time, but the first approval by the FDA for a biosimilar was made last week. Most drugs are small molecules, with a few (less than 100 or so) atoms. But some drugs are large molecules, typically proteins, and not small proteins at that. Some have been around for a while, like insulin and various hormones, but in the last few years there has been an explosion of use of monoclonal antibodies (MABs).

Generic drugs must be identical atom by atom to the name-brand drugs they substitute for. Biosimilars don't need that atom-by-atom identity, but they must undergo Phase 3 (large scale) human trials to prove that they are as safe and effective as what they would substitute for.

Amgen (AMGN) has large molecule commercial products that have already or will at some point go off patent. My assessment of Amgen's situation has been published at Seeking Alpha:

Why Amgen is a biotechnology portfolio cornerstone

I followed Amgen for a long time, but did not like the stock price given the pipeline and patent expiration issue. I changed my mind last year after I realizes Amgen had greatly improved its pipeline. I bought at $119.85 on March 24, 2014, and they added some more later. Today it closed at $152.70, so I am happy so far, and hope I am right that 2016 will be a banner year for the company.

Yesterday I added to my Mylan (MYL) position on a hunch at $55.09 per share. Today there was an investor presentation and the stock soared, ending at $59.00. My reasoning was not particularly addressed at the presentation. Since Mylan is one of the companies best situated to take advantage of the sale of biosimilars in the U.S., I believe the FDA approval of its first biosimilar (even though it was Novartis's Zarxio, which will compete with Amgen's Neupogen) means that other biosimilars in the pipeline may be acted on sooner rather than later.

My worry about biosimilars is litigation. Large molecules often are covered by more than one patent, including patents related to how they are manufactured, which are often filed long after the original patent. If everyone litigates to keep biosimilars off the market, then only the lawyers win. My hope is that in most cases companies will sign cross-licensing agreements of the type we have seen in the electronic device industry. Certainly that should be possible among the originators of the molecules, and license revenue from pure generics players would help ease the pain of competition.

Unlike generic drugs, biosimilars will not be as disadvantageous to the name-brands. In Europe they have typically been sold at a 20% to 30% discount. They are expensive to manufacture, and of course the generic makers want a decent profit margin.

Which reminds me that Mylan's presentation emphasized how margins are continuing to improve due to the efficiency of its world-wide manufacturing and distribution network. That and guidance for 2015 were the likely reasons the stock did well today.

My last published article on Mylan was back on August 27, 2014:

Mylan: Deeply undervalued on unwarranted approval concerns

Seattle Genetics Coverage

I have a new article at SeekingAlpha:

Seattle Genetics: The Long View

I have been aware of Seattle Genetics for quite some time, and began taking notes in September 2014. You can see my complete notes at William Meyers Seattle Genetics notes

And here's the link to Seattle Genetics home page.

I have not been putting new money into the market. I have been shifting out of IT stocks and into smaller biotechnology stocks, having had so much success with Gilead, Biogen-Idec, Celgene, Amgen, and Regeneron.

This is not financial advise, just a commentary on my own journalism and investing activities.

Keep diversified!

Seattle Genetics; Akamai

In my ongoing shift from IT to biotechnology stocks, I am dropping coverage of Akamai. This is not a reflection on the company. I once owned AKAM and did well with it. I have not owned it for a couple of years.

On the other hand I bought some Seattle Genetics (SGEN). This is a speculative buy. I am more impressed by their pipeline and platform than by the revenue from their one approved drug so far. I would guess that 2016 would be the earliest this investment could pay off substantially, as guidance for 2015 is for moderate growth. The thing to watch in 2015 is pipeline progress. You can check out my notes, Seattle Genetics Q4 2014 analyst call for more details.

Also, I hope to write Seeking Alpha articles on SGEN and AMGN, but can't say how soon. This afternoon I will be listening to the Applied Materials (AMAT) conference and taking notes.

Disclosure: I do not own AKAM. I own SGEN, AMGN, and AMAT.

Dot Hill, Adept Technology

I own and like data storage equipment maker Dot Hill (HILL), but wrote an article for Seeking Alpha in which I tried to be objective about both the opportunity and the reasons it might not work out:

Dot Hill's Q1 Guidance Will be Critical

As to Adept Technology, I want to emphasize that I don't dislike their technology or management. What I disliked was the run up of the stock price far past any reasonable valuation. To justify the valuation before yesterday's earnings report would have required a substantial climb in revenue, but instead there was a substantial decline in Q4. So the stock price plunged today. I did not even listen to the analyst call once I saw the press release. So if you want Q4 results you might as well go to the Adept Technology Q4  2014 press release.

I buy Alexion

This is just to note that this morning I bought my first shares of Alexion Pharmaceuticals (ALXN) for $175.12 per share.

I have had an eye on Alexion for a long time and wrote several articles on Alexion published by Seeking Alpha. I have been particularly interested since last week's earnings report (See my  Alexion Q4 2014 analyst call notes).

Today seems to be a biotechnology sell-off day, as those who trade frequently sell their biotech winnings to buy oil companies and futures. Fine. Of course Alexion could go down further, but my eye is on the prize in 2016. By then Asfotase Alpha sales should be ramping and we may see a clearer trajectory for the further reaches of the pipeline.

As earnings have ramped and the price come off highs, Alexion's P/E ratio has come off earlier levels, but it is still something to keep in mind. A stall in earnings growth could mean big losses for investors. Such a stall could come from European health programs putting pressures on Alexion over the high prices of its therapies.

The main reason for this short entry is that now that I own some ALXN, I may not be able to maintain the level of objectivity I like to have when I analyze a stock.

Keep diversified!

Seagate, Amgen and Illumina

My article on Seagate was published by Seeking Alpha:

Seagate Drops on Buyback Strategy Statement which provides a buying opportunity it you like a strong dividend.

I posted my notes on their analyst conference and also Amgen and Illumina:

Seagate (STX) Q4 2014 analyst conference notes

Amgen (AMGN) Q4 2014 analyst conference notes

Illumina (ILMN) Q4 2014 analyst conference notes

Back to blogging: AMD, XLNX

Well I haven't added to this blog for about a month. I had to focus on a project for an IT client. Turned it in yesterday.

So now I am trying to catch up on earnings season.

In the meantime I had good news on two fronts. Agenus announced another deal, this time with Incyte. Agenus remains one of my top picks for future growth.

Also Dot Hill firmed up its December quarter guidance. The stock shot up, and has been gradually declining as those who can't wait for what is likely to be a brilliant 2015 have been cashing in their gains.

I have posted my notes on three companies' quarter results calls:

Intel Q4 2014 analyst conference

AMD Q4 2014 analyst conference

Xilinx fiscal Q3 analyst conference

As I catch up on results from companies I follow, I'll start posting some analysis, as usual.