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Every day financial websites around the world publish newsworthy articles about specific stocks.  These range from earnings announcements or earnings downgrades to new product launches or partnership agreements to analyst upgrades or expert opinion pieces, and on and on.
In many cases news acts as a catalyst, driving the stock price of the company in question up or down. Although the stock price may be impacted by the news, “catalysts” often do not directly impact the fundamentals of the company immediately, but suggest the potential for longer term growth or decline. Tracking the financial news on a daily basis is a sound strategy for retail investors managing their own portfolios, but as is the case with most investing strategies, investors need to proceed with extreme caution.
Perhaps the most important reason for caution is the marked tendency of the investing community as a whole to “shoot first and ask questions later.”  You have perhaps seen positive news on a stock send a herd of investors into a buying frenzy only to see the price rise come to a halt and reverse direction when analysts and experts get around to questioning the longer term impact of the content of the news.
With that cautionary note in mind news items are invaluable sources for investors of all types.  Momentum traders may want to ride the wave while bottom-feeders may cast a net for the beaten down stock.  Long term investors digest the future potential of the content of the news on revenue, earnings, and profitability.  
In the long term, signing an agreement with a global powerhouse company can be more promising than a similar agreement with a smaller company without a global footprint.  A product launch aimed at a relatively small market is not as valuable as a launch with larger market potential.  News from companies in beaten-down sectors raises more cautionary concerns than news from “hot” sectors, especially those with long term tail-winds at their backs.
Right now it would be hard to argue against the healthcare sector as the sector with the strongest tail-winds as well as an inherently defensive character.  Regardless of economic conditions, sick people need treatment. We are at the beginning of the baby-boom retirements, a trend that will last for thirty to forty years, assuming 1964 was the year the baby-boom officially ended.  In addition, people are living longer adding to the growth potential of the sector.In the past few weeks we noted five healthcare stocks with interesting news appearing on the financial websites.  The following table includes price movement information along with forward looking estimates.

With a market cap of $52 billion, CSL Limited (CSL) is the largest healthcare stock on the ASX.  The company became the first ASX stock to breach the $100 per share price since the pre-GFC days.  The price took a dip shortly thereafter but has been climbing ever since.  Here is the price movement chart for CSL.

On 12 May CSL announced the European Medicines Agency Committee for Medicinal Products for Human Use granted full approval for IDELVION, a treatment controlling bleeding in adult and children patients with haemophilia B.  The treatment is also classed as a prophylaxis, which is a treatment for maintaining health and preventing disease.
There were two other news items in May, both announcing the US FDA (Food and Drug Administration) approvals.  The first was for a seasonal influenza vaccine, FLUCELVAX QUADRIVALENT.  Two days later CSL announced another FDA approval, this one for AFSTYLA, a treatment for preventing and reducing bleeding for haemophilia A.  
The company produces blood plasma products and vaccines, with a list of 20 blood plasma products.  Blood plasma treatments are not limited to hemophiliacs, but also include critical care situations usually involving surgery, as well as a variety of immune system treatments. The company recently acquired the vaccine operations of Swiss Pharma giant Novartis, coupling it with CSL’s own vaccine operation to create a new subsidiary company, Seqirus.
There were other news items about awards and such, along with Half Year Financial Results that made news in February.  CSL benefits from the low AUD and reports in US dollars.  Accounting for the currency conversion, the company’s net profit after tax (NPAT) was up 7% with revenues up 11%.  The trailing twelve month (TTM) P/E for CSL is 38.72, a number that seems to shout “EXPENSIVE”.  Regular followers of CSL know it has been considered expensive for some time now, yet the stock price keeps climbing.  The company is a dominant player in both the US and Europe, with an eye on expansion into the emerging market companies in Asia as consumers there look for better (and more expensive) healthcare treatments.
On 16 May investors read the news that Starpharma Limited (SPL) was partnering with Ansell Limited (ANN) to provide the Australian Olympic Team with “zika-proof” condoms.  Starpharma is providing its patented VivaGel® treatment to coat Ansell condoms.  The Zika virus is a growing concern world-wide and the presence of Zika bearing mosquitoes in Brazil have some medical experts calling for the Olympic Games to be postponed or moved. 
On 6 May the news from Starpharma highlighted the effectiveness of VivaGel® against the Zika Virus.  The market yawned in response to the 16 May news after spiking up on the earlier news about VivaGel® and the Zika virus.  Here is a one month price movement chart for SPL.

Starpharma’s VivaGel® is an example of an application of the company’s “dendrimer nanotechnology.” VivaGel® has antimicrobial properties, meaning it can kill unhealthy microorganisms.  The other major application the company is pursuing is a Dendrimer Drug Delivery (DEP™) system to be used in concert with other drugs to improve their efficacy. In addition, Starpharma is applying its technology to a variety of agricultural uses. 
The diversification into agricultural made news on 17 May when the company announced a licensing agreement for use of DEP™ with herbicides.  The agreement is with Israel-based Adama Agricultural Solutions Ltd. 
In September of 2015 Starpharma news of a licensing agreement with AstraZeneca Inc. did propel the stock forward.  The stock price quickly jumped from $0.57 to $0.74.  Starpharma reported negative 6.1 cents earnings per share in FY 2015.  Analysts expect the company to post a positive EPS of 3.4 cents per share by FY 2017.
AstraZeneca (NYSE:AZN) is a London based pharmaceutical company whose operations span the globe. The licensing agreement with them is for use with AstraZeneca’s cancer drugs.
On 27 May an OBJ Limited (OBJ) press release announced the signing of a five year product development (PDA) agreement with US based Proctor & Gamble (NYSE:PG), an expansion of an agreement reached in 2014, granting P&G rights to use OBJ’s technology with P&G products in that company’s fastest growing business segment – beauty and cosmetics.
Obviously P&G was happy enough with the technology to secure the rights for use with other P&G product categories.  These agreements alone are positive indicators for OBJ as P&G is an iconic US brand, tracing its roots back to 1837.  Prior to the GFC the company was ranked in the top 25 of Fortune 500 companies, but has dropped to #32 in 2015.  It remains in the top 100 of the Global 500 largest companies and ranks seventeenth in Most Admired Companies.
P&G makes a diversified array of consumer goods from soap to diapers to razers to cosmetics to personal healthcare. In July of 2015 the first P&G product to use the OBJ technology – the SK-II Eye Wand introduced in 2014 – had expanded into the Asian market with impressive results.  
What has caught the eye of a powerhouse company like P&G? The technology sounds like the stuff of science fiction or perhaps a mad scientist.  OBJ uses magnetic fields to improve the “through the skin”, or transdermal application of medicines and drugs. The application of specifically configured magnetic fields as a means of positively affecting the partitioning, diffusion and transdermal passage of drug and other active molecules is the core expertise of OBJ Limited. The technology consists of two platforms – magnetic-micro array and powered technology, which includes eSkin for cosmetic purposes and measured dosage devices for medicines and drugs. OBJ’s technology is proprietary but the company has released data to scientific journals for use in determining the benefits of the magnetic-array technology.  Here is one title: 
Journal of Pharmacy and Pharmacology: Benson H. A. E., Krishnan G., Liew Y., Wallace V.P., Edwards J., Enhanced skin permeation and hydration by magnetic field array: preliminary in-vitro and in-vivo assessment. J Pharm Pharmacol (in press)
OBJ Limited began in 2004 with its founders seeking to translate their experience with magnetic induction for bone health and joint disorders into improved drug delivery systems.  The stock price has rewarded shareholders over the last five years, with the big gains coinciding with the P&G agreements. Here is a five year chart for OBJ.

The company has additional development and collaboration agreements with the consumer healthcare and pain management divisions of London-based GSK (GlaxoSmithKline) – LSE: GBK – and with international beauty leader the Coty Group (NYSE:COTY). 
On 24 May Gordon Capital Research initiated coverage on Innate Immunotherapeutics Limited (IIL).  To get straight to the bottom line, the analyst presented a relative valuation range for the stock price from $1.22 to $2.43, based on market share, recent transactions, and “historic multiples”. 
Innate has its flagship drug candidate – MIS416 – in a Phase 2B efficacy trial, following positive outcomes in Phase 1 and Phase 2A trials.  The drug was manufactured with a technology called immunomodulator microparticle technology. What the technology does is modulate mechanisms within the immune system associated with multiple sclerosis.  The technology can also be used to induce the immune system to fight some cancers and infections. 
MIS416 will treat Secondary Progressive Multiple Sclerosis (SPMS), a disease for which there is no treatment currently available. The Gordon analyst estimates the annual revenue potential in this market at US$4 billion dollars.  The study will be complete sometime in 2017 at which point Innate management has stated its intention to partner with large global pharmaceutical companies or even sell the company outright.  The company already has patents for MIS416 in the US, Europe, and Australasia. 
The stock price began an upward move back in April followed news the company” Phase 2B trial was fully enrolled.  Here is the price movement chart for IIL.

The final stock is a veritable new-born on the ASX, beginning trading on 27 April. Volpara Health Technologies Ltd (VHT) is based in New Zealand and raised $10 million in its initial public offering.  The company has four software products used in breast imaging centres for improved screening and early detection of breast cancer. 
The company is already selling its products in 34 countries.  One of the major benefits of Volpara software is better measurement of breast density, the proportion of fat to milk ducts, lobules, and connective tissue. Women with high breast density are more likely to contract breast cancer than women with low breast density. 
A mammogram image is digitally analysed by Volpara software, resulting in reportedly superior measurement of breast density.  Volpara already has signed distribution deals with GE Healthcare and Siemens Medical Solutions USA, both manufacturers of imaging equipment.
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