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Helical Port - Mid Jan11 update



January 17, 2011 – Comments (0) | RELATED TICKERS: AMED , SGEN , BRLI.DL

The Helical Port, and the market in general are off to decent starts in 2011l.  The portfolio sharted the  year worth $50,173.96 and it up to $51,479.66 or +2.6%,  a not particularly meaningful, but still nice, start to the year. 

Most of the cash in the port has been deployed with the addition of Amedisys (AMED, 75 sh, bought 1/7 @ $35.12 comm. $7).  Amedisys provides home nursing / hospice care.  I will comment more on the buy in a separate post. 

There hasn’t been a whole lot of material news around the portfolio holdings, but a few items of interest popped up.

Amedisys  - JPMorgan presentation.  The company is growing but challenged by squeezes on reimbursements, and questions about billing activities.

Bioreference Laboratories - Filed its 10K.  The annual filings are always worth review.  The first thing I like to do is review the risk section and compare it to the previous year.  This serves two purposes, the first of which is to remind me of the risks and the second to see if anything has changed, especially something I may have missed.  I note headcount has increased, generally a good sign.  There was some language change around the passage of healthcare reform, a prior risk factor, but no substantial change in the classification of the risk such as those related to government reimbursement structures.    The second step is to look at revenue recognition policy and see if there have been changes that could signal more aggressive accounting practices.  I noticed no change here.  

Cardinal Health – JPMorgan presentation.

CVS – JPMorgan Presentation.  The company announced a sizable dividend increase of 42% to $0.125 per share.  Yield is just ~1.4% (forward) but at a low payout ratio.  The company also announced an acquisition, that of Universal American’s Medicare Part D operations for $1.25B.  The idea is to continue to add scale to the business.

Exelixis – JPMorgan Presentation.  Lead compound XL184, on which the company is now focused, was granted orphan drug status for thyroid cancer indications.  It also now has a first (generic) name, Cabozantinib. 

Genomic Health - JPMorgan Presentation.  The company confirmed that the genetic data obtained from the discovery effort in prostate cancer has resulted in the acceleration of the product development cycle.  Very positive news in my opinion.

Johnson & Johnson.  There was another recall of consumer products.  While this looks proactive, I am very disappointed that the announcement was made just prior to a holiday weekend.  J&J needs not just to take ownership of their issues (which are individually minor, but collectively concerning) but operationally and in the PR arena.  They aren’t doing the latter.  I’d like Weldon to leave.  There are rumors that J&J has made a bid, or at least ovations, to Smith and Nephew.  We’ll see.  Looks like there would be some product offering overlaps.

Medtronic – JPMorgan Presentation.  The previously announced Ardian (catheters) transaction closed.  A story on heart devices implied that these are inserted perhaps too frequently (and unnecessarily), a story and situation that could have legs and bears monitoring.

Pharmaceutical Products Development Inc. – The company noted another joint venture formation.  The venture will look at the development platform for biologic drugs and be run out of / in concert with Bioduro unit (China, preclinical).  It will be named Bioduro Biologics.

Seattle Genetics – JPMorgan Presentation. SGEN signed an agreement with Pfizer earlier in the month.  This will use the company’s polatform technology for a single target indication.  The main news around SGEN is that the company will prepare a BLA for Brentuximab Vedotin this quarter, and seek approval (or at least opinion on it) this year.


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