Three must-own cancer stocks for your biotechnology portfolio

June should be national cancer month.

Each year around this time, oncology groups and Wall Street brokerages hold a rash of conferences where researchers reveal the latest, greatest potential cancer cures.

This year has been no exception. Above all, we learned about remarkable advances in two exciting cancer therapies — and three great companies that will benefit.

Here’s more detail. (I’ve kept the technical language to a minimum.)

Cancer weapon

Tumors are smart. They know how to trick the immune system into missing them. But scientists are wising up to their tricks. In one evasive strategy, tumors release an enzyme that renders them invisible. If you block the enzyme, your immune system can find tumors and destroy them — with the help from cancer drugs. This is the key to an early-stage cancer weapon you should invest in, known as “IDO inhibitors.”

IDO stands for “Indoleamine 2,3-dioxygenase,” an enzyme released by tumors to blind the body’s immune system. “IDO is a strange drug target, because IDO inhibition by itself has no noticeable anti-cancer effect,” says Tanguy Seiwert, a cancer-therapy researcher and medical doctor who teaches at the University of Chicago. Suppressing IDO, however, makes tumors vulnerable.

The best “pure play” in IDO inhibitors is a company whose shares I own, and have suggested since December 2011 in my stock newsletter, Brush Up on Stocks. We’re up 750% in this company since 2011 ($14 to $120). But I think this stock is still a “hold” because there are bigger gains ahead.

Incyte Corp. INCY, +3.58% just released excellent data on its IDO inhibitor, called epacadostat, at the American Society of Clinical Oncology (ASCO) conference. In combination with cancer therapies from Merck & Co. MRK, +1.13%  and Bristol-Myers Squibb Co. BMY, +1.40% it showed excellent results against several kinds of cancer.

“It looks really good. I think this was a coming-out party for IDO inhibitors,” says Seiwert. Besides effectiveness, one of the main positives is that epacadostat is safe. This means it can be readily used to assist many other cancer drugs. “You can add it to a ton of things because the cost is low, in terms of toxicity.”

Incyte is an ideal biotech company for investors because it is self-funding. It has a very profitable drug called Jakafi, for a rare blood disorder, which supports research on new drugs like the IDO inhibitor. So investors dodge dilutive financings.

Fake news

So why hasn’t Incyte’s stock shot up? Investors have three main worries. But they look like false fears.

One bit of “fake news” circulating is that Incyte showed success, in part, only because it omitted patients from some results, which drove up the percentage of success stories. But this is a dubious critique for two reasons. Even if you included the three patients left out, it would only lower the success rate by a few percentage points, notes J.P. Morgan analyst Cory Kasimov. Second, Incyte offered several separate data sets showing success in many types of cancer, but the omission only affected one subgroup, says Seiwert. “I think this was way overblown.”

The next fear: Competitor NewLink Genetics Corp. NLNK, +3.27%   recently announced Roche AG RHHBY, +0.21%  handed back development rights to its IDO, following lousy results in a Roche study. Some investors take this as a sign that IDO is malarkey. But William Blair analyst Katherine Xu thinks this is bullish for Incyte, since it signals a competitor may be gone. NewLink’s IDO may have fared poorly because it works differently than Incyte’s IDO, or because Roche used an extremely sick patient population. Neither scenario reflects poorly on Incyte.

The third knock on Incyte is the one to watch. While Seiwert is impressed with Incyte’s IDO results, he points out the Phase II results are early-stage, and longer-term studies are needed to learn more about patient survival. Those studies are in the works. Incyte has nine Phase III studies planned with Merck and Bristol-Myers Squibb, says Xu. The outcomes here are key, since about $50 worth of the current $120 Incyte stock price is linked to IDO.

Turbo for the immune system

In another key advance in cancer therapy in the past two years, doctors have learned how to extract a patient’s blood and genetically tweak white blood cells so they override evasive tactics used by tumors.

Then the cells are reproduced in a lab to expand the supply, and put back in the patient’s body so they can move in for the kill. Hopefully, the cells then continue to proliferate and thrive and stay on hand to fight any more cancer that comes along.

Known as chimeric antigen receptor T-cell therapy (CAR-T), this approach has produced remarkable results against blood cancers in patients who otherwise had almost no hope of survival. CAR-T works by unblocking cancer cell receptors normally sought out by the immune system.

“This is one of the most exciting therapies in immunotherapy,” said Jae Park, a Memorial Sloan Kettering Cancer Center cancer researcher and medical doctor, at the Jefferies 2017 Global Healthcare Conference in early June.

Probably the best pure play here is Kite Pharma Inc. KITE, +1.64% At the Jefferies conference, Kite CEO Arie Belldegrun showed images of a patient’s body riddled with tumors, which disappeared about a month after treatment began. The patient showed no sign of the disease a year later.

Kite has a product coming on the market by the end of this year, and probably many more on the way, says Brad Loncar, the cancer research expert behind the Loncar Cancer Immunotherapy CNCR, +2.93%  exchange traded fund. This is pretty good progress for a therapy that was considered “science fiction” two years ago.

I suggested Kite in my stock letter at around $71 on May 17, and I think it’s still a “hold” even though it has already risen to $87, because this promises to be a blockbuster therapy. At the time, insiders were big buyers as the stock sold off on news of the death of a patient in one of its studies.

That unfortunate death highlights one of the key risks here. CAR-T patients have died because the therapy can cause brain swelling. Doctors are getting better at staving off adverse side effects, says Park. But they still don’t fully understand what causes them, which should raise a yellow flag for investors.

‘Impressive’ bluebird

Kite also faces competition from other companies developing CAR-T, including power players like Novartis AG NVS, +0.75% Pfizer Inc. PFE, +0.76% Johnson & Johnson JNJ, -0.21%  and GlaxoSmithKline PLC GSK, -0.09% as well as Juno Therapeutics Inc. JUNO, +3.91% Cellectis SA CLLS, +0.00% Adaptimmune Therapeutics PLC ADAP, -0.44% and two privately held companies called Poseida Therapeutics and Nanjing Legend Biotech.

Any of these efforts may pan out nicely, but my pick as a third CAR-T play is bluebird bio BLUE, +3.59% which is partnering with Celgene Corp. CELG, +2.29% Bluebird just announced really impressive results for its CAR-T candidate called bb2121. In early studies, just released at ASCO, this therapy produced an overall response rate of 90% to 100% among “hospice-type” patients whose cancer was so bad that seven different attempts to cure them, on average, had failed.

“To generate efficacy data on this level with an overall very tolerable safety profile is highly impressive,” says Kasimov, at J.P. Morgan. “With more key updates to come in 2017, we would continue to add to positions in bluebird bio.”

At the time of publication, Michael Brush held INCY. Brush has suggested INCY and KITE in his stock newsletter Brush Up on Stocks. Brush is a Manhattan-based financial writer who has covered business for the New York Times and The Economist group, and he attended Columbia Business School in the Knight-Bagehot program.

[“Source-ndtv”]

Strategist Jim Paulsen makes case for why stocks are about to hit report highs

Jim Paulsen, Wells Capital Management's chief investment strategist.

The S&P 500 ought to quickly hit a document excessive due to some of effective forces comingtogether, closely observed marketplace watcher Jim Paulsen said Thursday, following the exceptional -day rally on Wall avenue when you consider that March.

financial growth, not best inside the U.S. but round the sector, is choosing up in a “synchronized”fashion, and deflationary issues are fading, the chief investment strategist at Wells Capital managementadvised CNBC’s “Squawk container.”

“I assume we are [also] past what each person is perceiving because the worst earnings season. incomeget a touch higher the rest of the yr,” he stated.
If Federal Reserve policymakers do certainly hike interest quotes in June or July, as they have got signaled is a possibility, the stock market might view any such pass as a vote of confidence in the U.S.economic system, Paulsen stated, including a U.S. recession is not going inside the next few years.


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at the same time as close toterm wonderful, he did say the S&P should pull back later this 12 months — as inflation and wages start growing faster, elevating worries over the pace of destiny Fed charge hikes.

As of Wednesday’s near, the S&P index become within 2 percentage of its all-time ultimate excessive of two,a hundred thirty, set on may additionally 21, 2015. Paulsen has a yrquit target of two,050, whichcould imply a flat 2016. The S&P fell zero.73 percent for all of remaining yr.

there’s nonetheless plenty of pessimism,” Paulsen stated. “we are an eyelash faraway from all-time highs and there may be a number of humans nevertheless in the bear marketplace camp.” If too many peopleshift to the bull camp, he stated he may get greater cautious.

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LendingClub stocks pop as company seeks help after CEO departure

Lending Club banners hang on the facade of the New York Stock Exchange for it's IPO on December 11, 2014 in New York.

stocks of LendingClub rose more than eight percentage Monday as buyers digested a Reuters documentthat said the organisation had employed Jefferies to find buyers for loan funding.

a number of the corporation‘s largest buyers halted purchases of LendingClub loans after former CEO Renaud Laplanche resigned while the employer said a review determined staff knowingly sold $22 million in loans in March and April that did no longer meet the client‘s requirements.

given that our announcement weeks in the past, we have been approached via some of current andpotential new buyers approximately huge purchases of loans on our platform,” a spokesperson for thecompany stated in a announcement. “these are complicated discussions that by using their nature willtake the time to complete.”

NFL Twitter hacked, stocks Goodell ‘death’ hoax

NFL Commissioner Roger Goodell.

he Twitter account of the country wide football League become hacked Tuesday with a fake messageannouncing that Commissioner Roger Goodell had died.

The NFL speedy answered by using pronouncing the account had been hacked and Goodell turned into“alive and well.” Goodell tweeted later in the day, making mild of the problem.

this is the brand new in a chain of excessive-profile social media money owed being targeted with the aid of hackers. The Twitter account of singer Lana Del Rey changed into also hacked Tuesday.

Twitter declined to comment, directing CNBC to the NFL. The NFL stated that it has “engaged regulationenforcement to investigate the problem.” It brought that it’s miles “reviewing and strengthening [its] cyber-security features.”
The tweets published by using the hacker had been directly deleted, however display screen captures of the tweets may be visible under.

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10 overbought stocks prepared to drop

Dropping paratroopers, sky dive

a collection of high-flying names can be at risk of a pullback because the market rolls over this month,buyers warn.
since the S&P 500 reached a 52-week low in early February, the index has staged one of the most powerfulrallies in years, sending many stocks to what some traders recall “overbought” territory. The S&P’s failure toreach a new excessive, but, has some market watchers involved.

“The marketplace has been flat for the closing months locating it difficult to surpass the increased 17.5(instances) forward fairness a couple of,” JPMorgan U.S. fairness strategist Dubravko Lakos-Bujas wrote in a word to customers Thursday expressing a careful tone.

Like Lakos-Bujas, other equity strategists continue to be skeptical about the durability of the recent rally.

right here are some of the names that might be first in line to fall, must a larger pullback materialize.

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searching ‘ominous’ for overwhelmed-down retail stocks: Technician

Shoppers pass through Herald Square in New York.

A string of dismal earnings and sales numbers has retail shares struggling.

despite some robust showings from a few agencies like Wal-Mart, the retail ETF (XRT) is about to log its5thimmediately week of losses. And in keeping with Instinet dealer and technical analyst Frank Cappelleri, the worst should still be beforehand for retailers.

examine MoreGood day in retail, but it’s nonetheless eyeing longest weekly dropping streak when you consider that ’08

over the past 2½ years, it’s traced out this pretty huge and pretty bearish ominous pattern,” he statedThursday on CNBC’s “buying and selling country,” regarding the XRT. “If it goes under that $39 stage,the extent it became final at in February of this yr, we will see an awful lot lower points final seenmaybe in past due 2012.”

lots of the uncertainty comes from the outlook on americapurchasers, in step with Cappelleri. clientspending multiplied handiest at a 1.9 percent rate all through the primary region, leaving many storesstruggling to hold sales leading into income season. Numbers progressed in April as customer spending rose to its maximum in a 12 months, but the boost was broadly speaking fueled by using on-lineoutlets instead of the conventional huge names. Amazon is currently the ETF’s largest preserving.

at the same time as Cappelleri says the charts look bearish, the basics appearance first rate, consistent with S&P funding Advisory leader funding Officer Erin Gibbs.

some of these stocks are definitely starting to appearance beaten up, a number of them are down as a lot as 80 percentage, you’re quite a great deal buying the lowest,” Gibbs stated Thursday on “tradingkingdom.” “however we’re speakme 12 months out for quite a few those agencies wherein it is a protractedtime period hold. So on the short term I would not get in necessarily proper now, [but]longer term I assume there’s a few actual possibilities.”

Gibbs believes that many of retail’s suffering names can choose themselves back up, but they’ll shoulddownsize with a view to do so.

“[Retailers] need a quarter to close a couple stores and reduce their footprints and flip around, and those are the instances while you may in reality make a few exceptional offers,” she stated.

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Bank stocks tracking for worst week since early January

Carson Block speaking the SOHN Conference in New York on May 4th, 2016.

Carson Block speaking the SOHN Conference in New York on May 4th, 2016.
David A. Grogan | CNBC
Carson Block speaking the SOHN Conference in New York on May 4th, 2016.
This week has not been kind to bank stocks.

The SPDR S&P Bank ETF (KBE) was down nearly 4 percent for the week, putting it on track for its worst weekly performance since the week of Jan. 8, when it lost more than 8 percent.

The index also dipped below its 50-day moving average on an intraday basis for the first time since April 8. The stock closed up 0.39 percent at $31.23, above the 50-day moving average of 30.93.

Bank of the Ozarks weighed on the index most, falling nearly 10 percent for the week. On Wednesday, short-selling firm Muddy Waters Capital unveiled a short position on the bank’s stock, saying it was making outsized loans relative to its assets and was too heavily concentrated in real estate lending.

In 2016, KBE has fallen more than 7 percent, while Ozarks has shed nearly 25 percent.

Bank stocks tracking for worst week since early January

Carson Block speaking the SOHN Conference in New York on May 4th, 2016.

Carson Block speaking the SOHN Conference in New York on May 4th, 2016.
David A. Grogan | CNBC
Carson Block speaking the SOHN Conference in New York on May 4th, 2016.
This week has not been kind to bank stocks.

The SPDR S&P Bank ETF (KBE) was down nearly 4 percent for the week, putting it on track for its worst weekly performance since the week of Jan. 8, when it lost more than 8 percent.

The index also dipped below its 50-day moving average on an intraday basis for the first time since April 8. The stock closed up 0.39 percent at $31.23, above the 50-day moving average of 30.93.

Bank of the Ozarks weighed on the index most, falling nearly 10 percent for the week. On Wednesday, short-selling firm Muddy Waters Capital unveiled a short position on the bank’s stock, saying it was making outsized loans relative to its assets and was too heavily concentrated in real estate lending.

In 2016, KBE has fallen more than 7 percent, while Ozarks has shed nearly 25 percent.

large information breaches have been appropriate for protection stocks

KTSDESIGN | technology picture Library | Getty pics
IT safety stocks have soared after the seven massive records breaches made public during the last 3years, consistent with the Bessemer assignment partners Cyber Index released Tuesday.

The BVP Cyber Index tracked the capital-weighted performance when you consider that Jan. 1, 2011, of 29 public businesses whose number one commercial enterprise is cybersecurity. nearly half of thoseorganizations are worth greater than a thousand million greenbacks.

the public IT protection sector outperformed the inventory marketplace by extra than two instances at some stage in that point, and outperformed the market by means of about five instances the month afterthe ones breaches have been made public.

“With IT security budgets approaching 10 percent annual increase costs, the marketplace is projected to double over the coming five years, achieving almost $two hundred billion in income,” said BVPcompanion David Cowan.

Technician with computer, checking aisle of server garage shelves in information center
seventy five% of web sites vulnerable to this cyber risk: take a look at
The IT safety region broke far from the market three ½ years in the past. “That become about the timewhile businesses commenced spending extra on cybersecurity to defend themselves against this newmagnificence of facts breach,” said Cowan.

due to the fact that then, it has visible more than twice the gains of the Nasdaq and S&P indexes. the arena spikes in the month after reports of most important breaches. over the years, those multiples seemto settle returned in step with the overall organization generation region, said Cowan.

the most important spike followed information of the Anthem facts breach in February 2015, whilst the BVP Cyber Index shot up 29 percent. “outstanding medical data breaches are a lot greater concerning tosufferers than monetary breaches,” he said.

GM, Ford stocks should surge at least 25%: Barron’s

A General Motors worker puts the finishing touches on a new 2016 Chevrolet Camaro at the Lansing Grand River Assembly Plant October 26, 2015 in Lansing, Michigan.

stocks of popular cars and Ford Motor ought to rise as a minimum 25 percent within the subsequent yr, with U.S. automobile sales possibly to are available in stronger than many traders fear, in step with a fileon Sunday in Barron’s financial newspaper.

both agenciesstocks look reasonably-priced, Barron’s said. Ford and popular automobiles exchange at 6.6 times and five.6 times expected 2016 profits, respectively. the broader S&P 500 has a forward fee-to-profits ratio of 17.

stocks of both businesses have been beneath stress due to investor worry of a downturn within the U.S.vehicle marketplace as well as economic weak spot in China. however buyers are forgetting severalpositives, Barron’s said. For one thing, the automakers are much leaner than in previous years, that may helpprofitability.

also, even as united states of americasales ought to slip from the first quarter‘s pace of 17 million-plus unitsa yr, they are likely to plateau at 16.five million to 17 million automobiles annually, the publication stated.both GM and Ford have stated they could still ruin although annual sales fell to approximately elevenmillion.
Healthcare fees for retired unionized workers are not an duty, Barron’s added. The fees had been shifted to abelieve fund run with the aid of the United car workers that the automakers paid billions to create.
GM shares closed at $30.fifty six on Friday, and Ford shares at $12.ninety four.

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