Biogen: Before I Forget
Great Ones, I don’t usually get personal in Great Stuff. But this news on Biogen’s (Nasdaq: BIIB) Alzheimer’s drug has me on edge today.
You see, my grandfather died of Alzheimer’s. It’s been more than a decade since he passed, but some wounds never fade. I still remember watching Indiana Jones, Humphrey Bogart and Fred Astaire movies with him on the weekends. He’d bring over Little Debbie snack cakes from the grocery store, and we’d dive into a Saturday night movie binge.
He was one of my best friends growing up, and his passing was (and still is) hard to take. I mean, he’s a big reason for my love of pop culture and movie references, without which … well, there’d be no Great Stuff.
Typically, investing should be completely removed from personal feelings.
Removing emotions from the investing equation keeps you from buying crappy, sentimental stocks, and it keeps you from chasing losses looking for a rebound that just won’t happen.
It’s one of the critical keys to investing, after all.
But Biogen is really testing my patience this week.
The FDA just approved Biogen’s Alzheimer’s drug, aducanumab, which will be sold under the name Aduhelm. Like anyone will remember either of those names.
Aduhelm was granted broad approval, meaning the FDA didn’t limit its use to certain Alzheimer’s patients.
Analysts were shocked at the broad leeway because Aduhelm was approved under the FDA’s accelerated process, meaning the organization decided that the drug’s benefits outweigh its risks.
The thing is, Aduhelm doesn’t directly treat Alzheimer’s or the accompanying dementia. What it does is reduce the amyloid beta plaques that have been linked to causing Alzheimer’s disease and its progression.
Now, don’t get me wrong: This is good news! If it helps even one Alzheimer’s sufferer, I’ll be ecstatic. No one should have to watch a loved one slowly forget who they are.
But this quote from FDA Drug Evaluation and Research head, Dr. Patrizia Cavazzoni, is disconcerting:
Reasonably likely? That doesn’t instill confidence. Would you buy a car that was “reasonably likely” to get you where you were going? Would you fly on a plane that was “reasonably likely” to stay in the air?
Then again, this is Alzheimer’s … so, I guess we’ll take what we can get.
If that was all, then I wouldn’t be on this rant. Today, Biogen dropped the real bomb … and the reason why I’m more than a little agitated.
Heading into the approval process, analysts believed that Biogen would charge about $10,000 to $25,000 annually for the maintenance dose treatment level. Biogen set that price at $56,000, more than double the highest analyst estimate.
$56,000 for a drug that doesn’t directly treat Alzheimer’s.
$56,000 for a drug that doesn’t deal with dementia.
$56,000 for a drug that is “reasonably likely to result in a clinical benefit.”
My grandfather couldn’t have afforded that “reasonable likelihood.” I would argue that most Alzheimer’s sufferers can’t afford it either. That cost will fall on Medicare, where the vast majority of Alzheimer’s sufferers get their health care.
So, in other words, that cost will fall on American taxpayers. And analysts believe this one drug could increase Medicare costs by more than $14 billion per year.
So … yeah. Not only am I pissed that this drug is just “reasonably likely” to do something, but I’m also pissed that Biogen thinks that $56,000 per year … or potentially $14 billion in total … is an OK price to pay for “reasonably likely.”
What’s more, do you want more government regulation? Because this is how you get more government regulation. Biogen’s ridiculous pricing could spur Congress to act … and nobody in the biotech or pharmaceutical sector wants that.
I’m sorry, Great Ones. BIIB might be a great investment based on the potential revenue from this Alzheimer’s treatment. But I’ll not be recommending this stock, no matter how well sales go … if for no other reason than spite.
♫ I will remember before I forget. Before I forget that… ♫
Before I forget that a presentation just landed on my desk from our newest analyst at Banyan Hill, Adam O’Dell.
In it, Adam reveals the details of an extremely rare profit situation that’s unfolding in the gold markets right now. The last time it showed up, investors had the chance to make truly exceptional gains as high as 4,558% … enough to turn $10,000 into nearly half a million bucks.
But for reasons Adam explains here, the window to get in is closing fast. Click here for the full story.
Good: You Like Me! You Really Like Me!
Tesla (Nasdaq: TSLA) is back, baby!
Or at least, that’s the narrative coming out of the brokerage community today. The electric vehicle (EV) maker announced that it delivered 33,463 EVs in China during May, bouncing back from April’s disappointing figures.
Apparently, everything is now A-OK in China. There’s no more Chinese Tesla trap. No more government-backed anti-Tesla sentiment growing in China. And if you believe that … I’ve got some oceanfront property in Arizona. From the front porch, you can see the sea.
Yes, Tesla’s deliveries rebounded in May. But April’s 25,845 deliveries were well below March’s 35,476 EVs delivered. What’s more, analysts expected deliveries to rise month over month in April. And then May’s deliveries were below March’s.
I’m not a math genius, but even I can figure out that Tesla’s Chinese growth isn’t going as expected. May’s 33,463 new Chinese Teslas may be growth over a disappointing April, but the numbers are still below where analysts projected growth would be at this point.
Yes, yes … I know that analysts have been wrong a lot this year. I said as much just yesterday.
The growth in deliveries last month was good. But where I think analysts are wrong isn’t about monthly deliveries growth: I think they’re wrong about Chinese consumers’ continued patronage of Tesla.
China is the fastest-growing car market on the planet, and Tesla needs to win big there. With several solid native Chinese EV companies now competing with Tesla, I don’t see that big win coming anymore.
Better: Takedown, Shakedown…
Everybody wants into the crowded line. Takedown, shakedown… Fastly (NYSE: FSLY) was busted.
Last night, websites across the globe were offline. The New York Times, CNN, Twitch, Reddit, the Guardian, the U.K. government’s website … all were down.
Ironically, even the website IsItDownForEveryoneOrJustMe.com — a site dedicated to letting you know if a website is actually down or not — was down.
Why? Because someone at Fastly configured a service incorrectly:
On the plus side, Fastly was quick off the mark and had service restored within hours.
On the not-so-plus side, the outage sparked cybersecurity fears in the wake of the attack on the Colonial Pipeline and the JBS meatpacking company.
FSLY initially plunged in pre-market trading following the news. But, it seems that relief that this wasn’t just another cyberattack has won the day. FSLY rallied as much as 6%, despite the company’s snafu.
Best: LUV In The Sky
Even the airlines can’t resist a little summer-season shopping, and Boeing’s (NYSE: BA) biggest 737 fan is edging on superfan status right now.
I thought a 737’s fans were in the engine?
Thanks, Dad… Now, back in March, Southwest Airlines (NYSE: LUV) ordered more planes to freshen up its all-737 fleet, with the option to buy more planes if need be. At the time, air travel just began to tick up as vaccines rolled out, and the big buys were a boom of confidence for Boeing as a whole.
Today, Southwest announced it wants another 34 of the smaller 737 MAX 7 planes to help meet the increase in travel demand. All told, the airline is on the hook for 234 Max 7 planes and 149 Max 8 planes through the next decade.
Now, who could’ve possibly predicted this resurgence in air travel? And the ensuing Boeing binge that would follow? Was it Great Stuff Picks readers? The same ones who bought Boeing way back in December?
I think it was. Y’all are up about 16% on Boeing so far this year, though unfortunately, both BA and LUV shares barely budged today.
For a day, Ford was the Don of Detroit again, reveling in Wall Street’s ballyhoo and rampant Top Gun-style tomfoolery (you’re welcome, by the way). But, as anyone who’s followed the company knows, it was only a matter of time before Ford’s foot returned to its mouth holster. So … here we are.
Ford Product Chief Hau Thai-Tang has some insight on who Ford’s targeting with its new compact pickup:
Fascinating. It’s almost as if Ford forgot … its entire history in the small truck market?
For the past decade, Ford has sized up its trucks like Starbucks does coffee: Midsized is now small, what was large is now medium, and small? Forget small — you need more! You need a gargantuan-sized truck with an unreasonably short bed! More, more, bigger, bigger!
This hype is Ford’s M.O. in action: “We completely ignored this segment of the truck market since like … 2010. Sorry, LOL. Say, you wouldn’t be interested in a small truck now, would you?”
Ford could’ve cornered the compact truck market all throughout the 2010s. Instead, it languished in all-too-similar sedan mediocrity and cranked out small-to-mid-sized crossovers no one asked for, and no one will ever remember.
And Ford could’ve won those small-truck-loving customers back when it brought back the Ranger but no sir! The company’s “reinvention” was to make the once-compact and nimble Ranger look like a deformed F-150 that skipped leg day.
Now I’m supposed to be impressed by Ford targeting the same compact pickup drivers it alienated a decade ago? That’s cute. Real cute.
So, what else does Ford have to say? Here’s Todd Eckert, marketing manager for Ford’s truck group:
Don’t get me wrong: I actually kinda dig the Maverick’s look — and its lower, consumer-focused price point. But let’s not kid ourselves here: Ford created the status quo and the “stereotypes of what a pickup truck can be.”
Ford (along with GM, to be fair) has ushered in the era of near-semitruck-sized duallies that never see any actual dirt. And in that time, Ford fans who wanted something else — and I mean anything other than some boring Fusion, no offense — jumped ship and likely bought cars from other automakers.
Ford birthed these behemoth pavement princesses, and it’s Ford’s job to free us of them.
But I want to hear what you think about Ford’s foot-in-mouth syndrome and the long-awaited return of the compact truck. Do you think small trucks should’ve been left in the noughties? Or should Ford pickup the slack and bring compact trucks back?
Let me know in the ol’ inbox-a-roo: GreatStuffToday@BanyanHill.com is where you can let your rants fly like the wind and join in the Great Stuff conversation. And in the meantime, here’s where else you can find us:
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Until next time, stay Great!
Editor, Great Stuff