mandag den 4. juli 2016

Forget "Pharmaceuticals" - The Future Of Biotechnology

 
Forget "Pharmaceuticals" - The Future Of Biotechnology

By Victor Hill

Investors often suppose that biotechnology is all about the development of new wonder drugs which zap bacteria and viruses – pharmacology. But in fact the best investment prospects probably reside in other, newer fields of medicine, of which there are several. Today I'm taking a peek into just two of the emerging disciplines which could transform medicine within our lifetimes: immunotherapy and synthetic biology.

Recently I wrote that Big Pharma has shown itself to be inadequate to the challenge of antibiotic resistance – because the development of new blockbuster drugs no longer pays. The economics of pharmacology have become unfavourable. The typical cost of bringing a new drug to market has soared from US$150 million to at least US$1 billion in the last 20 years. And for every successful drug brought to market there might be a dozen which are never commercialised. The pharmaceutical giant Pfizer Inc. (NYSE:PFE) is more interested in producing high margin multivitamins than in developing new blockbusters. But I also reflected recently in another piece that the extension of human longevity, which has more than doubled over the last 150 years, has been driven as much by soap as by penicillin...

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The Master Investor Market Report

  • The FTSE 100 closed the day at 6,522.26, a decrease of 55.57 points.
  • The FTSE 250 fell 348.79 points to finish at 16,116.70.
  • The FTSE All Share dropped 34.18 points to finish at 3,521.27.
  • The FTSE AIM All Share finished at 713.57, up by 0.09 points.

Shares in ship broker Clarkson (CKN) sank by 16.10% to 1,850p after the company announced that freight rates have continued to fall across the first half of 2016, almost reaching all-time lows in some areas. The recent improvements in oil prices have led to some encouraging signs of offshore broking activity, but it will take some time and additional price movement for this to reach meaningful volumes. The financial division is also struggling as low rates and asset values have made trading more spot-focused.

 
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Financial services giant HSBC (HSBA) completed the sale of its Brazilian operations on the 1st of July. The sale was part of the group's global strategy to reduce complexity and optimise its global network. Investec downgraded the stock from a "hold" to a "sell" with a target price of 425p. The broker said that the bank had escaped the hit that rivals had suffered after the Brexit vote, but they expect a forthcoming interest rate cut to impact results. HSBC shares fell by 6.10p to 463.75p.

Telematics and data specialist Trakm8 (TRAK) has increased its revenues by 44% to £25.6 million during the year ended 31st March due to a combination of good organic growth and the acquisitions of DCS Systems and  Route Monkey. Profits before taxation also climbed by 76% to £3 million. The company won a number of substantial contracts and, given the levels of recurring revenue, management are confident that this growth can continue during the current financial year. Trakm8 shares climbed 15p to 250p.

Tomorrow's news today

Persimmon (PSN) and Carillion (CLLN) will release trading statements.

Quote of the day

"What you get free costs too much."
-Jean Anouilh

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