Cerner Corporation Momentum Squeeze On Awesome Revenue Growth

The stock chart of Cerner Corporation shows a momentum squeeze candidate on excellent sales growth and new business from the Carolinas HealthCare System (CHS).

Cerner announced on June 21, 2017, that the Carolinas HealthCare System (CHS) has selected Cerner’s HealtheIntent public health management platform to organize and manage care for its more than 12 million individual interactions every year across its facilities and clinically integrated network, Carolinas Physician Alliance (CPA).

HealtheIntent is intended to aggregate data in real-time from several sources to produce a single, comprehensive view of someone’s experiences throughout the continuum of health and care.

The objective is to equip medical professionals with a holistic and timely picture of a patient’s connections through CHS, in addition to provide system wide insights to ultimately improve quality of care and reduce costs for the entire CHS patient population.

Cerner Corporation Stock Chart

CERN presents a good setup pattern. Prices have been consolidating lately and a momentum squeeze has formed on the chart.

There is a resistance zone just above the current price starting at 68.32. Right above this resistance zone may be a good entry point in Cerner Corporation. There is a support zone below the current price at 67.04, a stop order could be placed below this zone.

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Centene Gets S&P Rating Upgrade to BB+ from BB

May 18, 2017: S&P raises Centene’s rating one notch to BB+ from BB with an outlook rating of stable. “The rating upgrade on Centene reflects the company’s continued successful execution of its growth and profitability initiatives since we assigned a positive outlook two years ago (in May 2015)”, said Julie Herman, S&P Global credit rating analyst. Herman continued, “As a result, we believe Centene has increasingly differentiated itself favorably from its closest peers Wellcare and Molina, both of which we rate BB/Stable.”

The stable outlook on Centene reflects our expectation that the company will maintain its strong competitive position in the managed Medicaid market while continuing to diversify its profile, particularly in Medicare and specialty services. Consistent with our base-case economic forecast, we expect the company to show revenue growth of 5%-15% over the next two years, with an EBIT ROR of about 2.5%-3.5%. We expect financial leverage to remain elevated but to continue to drop year over year, reaching below 40% over the next two years. We expect consolidated GAAP capitalization to improve year over year through earnings growth, but remain modestly deficient at ‘BBB’ over the next two years. However, we expect consolidated risk-based capital levels to remain around 350%.

April 25, 2017: Centene reports Q1 EPS of $1.12 adj versus the $1.06 estimate. Revenue also beat coming in at $11.7 billion versus the $11.4 billion estimate. Quarter-end at-risk managed care membership came in at 12.1 million or +5% YoY.

February 7, 2017: Centene reports Q4 EPS of $1.19 versus the $1.12 estimate. Revenue also beat coming in at $11.9 billion versus the $10.9 billion estimate. Quarter-end at-risk managed care membership came in at 11.44 million versus 5.1 million last year representing an increase of 223% YoY, nice!

January 5, 2017: Centene Corporation announced today that its Pennsylvania subsidiary, Pennsylvania Health & Wellness, has been selected by the Pennsylvania Department of Human Services to serve Medicaid recipients enrolled in the HealthChoices program in three zones. Pending regulatory approval and successful completion of readiness review, the three-year agreement is expected to commence June 1, 2017. In April, Centene was originally selected to provide services in three zones for HealthChoices. Today’s award is in response to a re-issue of the HealthChoices award.

The Department completed an evaluation and scoring of the proposal and has selected Centene’s proposal for the Southeast Zone, the Southwest Zone, and the Lehigh Capital Zone of Pennsylvania. The HealthChoices program covers low-income children and families, individuals with disabilities, as well as those newly eligible under the Affordable Care Act expansion throughout the state of Pennsylvania.

In addition to the Health Choices Medicaid award, Centene was previously selected under a separate contract by the departments of Human Services and Aging to serve enrollees in the Community HealthChoices program statewide, pending regulatory approval and successful completion of readiness review. Under this agreement, Pennsylvania Health & Wellness will coordinate physical health and long-term services and supports (LTSS), if needed, to enhance the quality of medical care and access to all appropriate services to more than 420,000 individuals who are dually eligible for Medicare and Medicaid, older Pennsylvanians and individuals with disabilities.

January 3, 2017: Piper Jaffray/Simmons initiates coverage of Centene Corporation with an Overweight rating, and sets a price target of $67.

December 20, 2016: JPMorgan Chase and Co initiates coverage of Centene Corporation with an Overweight rating, and sets a price target of $75. JPMorgan also added Centene to its Analyst Focus List saying that while Republican “repeal/replace” efforts present some risk to both the Medicaid RPF pipeline and current Obamacare-population earnings, they believe the current valuation is more than discounting that risk.

Centene Corporation, a Fortune 500 company, is a diversified, multi-national healthcare enterprise that provides a portfolio of services to government-sponsored healthcare programs, focusing on under-insured and uninsured individuals.

Many receive benefits provided under Medicaid, including the State Children’s Health Insurance Program (CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and Long Term Care (LTC), in addition to other state-sponsored/hybrid programs and Medicare (Special Needs Plans). The Company operates local health plans and offers a range of health insurance solutions. It also contracts with other healthcare and commercial organizations to provide specialty services including behavioral health management, care management software, correctional healthcare services, dental benefits management, in-home health services, life and health management, managed vision, pharmacy benefits management, specialty pharmacy and telehealth services.

Sell Catalyst Pharmaceuticals For a 47% Gain

April 16, 2017: Sell Catalyst Pharmaceuticals for a 47% gain in 60 days and congratulations if you made money on the trade.

January 4, 2017: The popular SeekingAlpha blogger Hawkinvest, with over 5,000 followers, posted a positive article on Catalyst Pharmaceuticals today that got the stock moving higher. Hawkinvest writes

Biotech and healthcare stocks underperformed in 2016 and that means this is a sector that could offer value and rebound potential in 2017. With all of this in mind, I have been looking for “hidden gems” in the biotech sector. I have recently found a couple of very interesting investment opportunities that offer an excellent risk to reward ratio and one of the stocks I am bullish on now is Catalyst Pharmaceuticals, Inc

Catalyst Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of therapies for people with rare debilitating diseases. Its lead product candidate is Firdapse, a proprietary form of amifampridine phosphate, which completed Phase III clinical trial for the treatment of patients with Lambert-Eaton Myasthenic syndrome; and is in small blinded clinical trial to treat Congenital Myasthenic syndromes, as well as is in Phase II/III clinical trial for the treatment of MuSK-antibody positive myasthenia gravis.

Sell Exact Sciences For a 55% Win!

March 4, 2017: Sell Exact Sciences for a 55% win in 37 days. Congratulations if you were able to make money on the trade and always remember to sell your positions before you get the sell alert from me. I review more than 200 open stock positions over the weekend when I have time and so my sell signals are always going to come later.

March 2, 2017: A study from Exact Sciences Corp. and Mayo Clinic released today by the American Association of Cancer Research (AACR) shows promise for the development of a blood-based lung cancer test. Researchers conducted a multi-round study of nearly 400 patients, which demonstrated high accuracy for detecting lung cancer at all stages.

AACR released an abstract of the study today, ahead of the presentation of the results on April 2, 2017, during the AACR 2017 annual meeting. The findings from the study of 398 patients (311 controls and 87 cancers) demonstrate that biomarkers in plasma achieved high accuracy for all types and stages of lung cancer. Using two independent regression modeling approaches, a panel of four novel methylated DNA markers demonstrated a sensitivity of 91-96 percent at a specificity of 90-94 percent.

More studies are needed to corroborate accuracy, however, this plasma DNA test approach appears to be a promising new method and may serve as a rational follow-up to the common findings of lung nodules on CT scanning and may have application in screening for lung cancer.

February 21, 2017: Roth Capital raised Exact Sciences to Buy from Neutral and set a price target of $26. The price target was raised to $26 from $15. Roth Capital says Exact Sciences announced Q4 revenues in-line with its pre-announcement beat driven by strong volumes and higher ASPs, and unveiled 2017 guidance above expectations.

February 5, 2017: On February 2, 2017, Exact Sciences announced that Cologuard® is included in the Medicare Advantage Advance Notice and Draft Call letter. Cologuard’s inclusion in the final Star Ratings will allow Medicare Advantage plans to increase their Star Rating when patients complete Exact Sciences’ non-invasive colon cancer screening test.

Kevin Conroy, chairman and CEO of Exact Sciences said, “The proposed inclusion of Cologuard in the Star Ratings program is an important step toward it becoming a standard of care for colon cancer screening. Health insurers would be eligible to receive Medicare Advantage Star Rating quality credit when their members are screened using Cologuard.”

The Centers for Medicare and Medicaid Services (CMS) Medicare Advantage Star Ratings are directly impacted by the Healthcare Effectiveness Data and Information Set (HEDIS). The HEDIS quality measures were updated by the National Committee for Quality Assurance (NCQA) on October 3, 2016, to include Cologuard on an every three-year screening schedule. CMS’s proposal to broaden the colorectal cancer screening quality measure is subject to a 60-day public comment period. The proposal aligns the Star Ratings with the HEDIS quality ratings and the colorectal cancer screening guidelines of the U.S. Preventive Services Task Force, the American Cancer Society and others. Just as HEDIS 2017 quality measures are used to audit and report the 2016 performance of providers and health systems, the Stars Ratings use the HEDIS data to calculate the quality performance of Medicare Advantage plans.

January 8, 2017: Exact Sciences guides Q4 revenue from $34.9 million to $35.4 million versus the $29.5 million estimate. Q4 saw the completion of approximately 82,000 Cologuard tests during the fourth quarter of 2016, which represents growth of 114 percent from the same period of 2015.

More than 9,500 health care providers ordered Cologuard for the first time during the fourth quarter ended Dec. 31, 2016. The number of providers who have ordered Cologuard since it was launched increased to nearly 60,000 during 2016, an increase of 122 percent from the prior year.

Insurance coverage of Cologuard expanded by 67 percent during 2016. Coverage has increased by 62 million lives since June 2016, when Cologuard was included in the U.S. Preventive Services Task Force’s final colorectal cancer screening recommendations. More than 163 million people are in health plans that cover Cologuard as of January 6, 2017.

January 5, 2017: Exact Sciences announced that the Blue Cross Blue Shield Association’s (BCBSA) Center for Clinical Effectiveness “Evidence Street” recently released a positive review of Cologuard to its members. BCBSA is a national federation of 36 Blue Cross and Blue Shield companies that insure one in three Americans. This continues the positive momentum for Cologuard, as coverage increased by 67 percent in 2016 and nearly 163 million Americans are now in health plans that cover the non-invasive colorectal cancer screening option. The BCBSA’s Center for Clinical Effectiveness is an organization that assesses the effectiveness of medical devices, procedures, and biological products through comprehensive reviews and clinical evidence. The Evidence Street assessment follows other positive reviews of Cologuard, which is now included in the recommendations of the U.S. Preventive Services Task Force, and the colorectal cancer screening guidelines of the American Cancer Society and the National Comprehensive Cancer Network. This assessment is influential for association members and non-members who look to the Center for Clinical Effectiveness for guidance. BCBSA does not endorse specific companies or products nor make coverage decisions.

December 12, 2016: Exact Sciences announced today under a recently-signed contract, Humana Inc. agreed to cover Cologuard as an in-network service for its members, effective January 1, 2017. Under terms of the agreement, Cologuard will be available to most Humana beneficiaries with no co-pay. Humana covers nearly 10 million recipients and is the nation’s fifth-largest commercial insurer.

With Humana’s inclusion of Cologuard as an in-network service, the test is now covered by a cross-section of health plans nationwide with more than 153 million members. This is an increase of more than 50 million members since June 2016 when Cologuard was included as an A-rated service in the colorectal cancer screening guidelines of the U.S. Preventive Services Task Force. More than 68 percent of Cologuard’s addressable population are enrolled in plans that cover the test.

Exact Sciences Corp. is a molecular diagnostics company focused on colorectal cancer. The company has exclusive intellectual property protecting its non-invasive, molecular screening technology for the detection of colorectal cancer. Stool-based DNA technology is included in the colorectal cancer screening guidelines of the American Cancer Society and the U.S. Multi-Society Task Force on Colorectal Cancer.

Sell Global Blood Therapeutics For a Huge 91% Win!

March 4, 2017: Sell Global Blood Therapeutics for a monster 91% win in 41 days! Congratulations if you were able to make money on the trade.

January 4, 2017: JPMorgan Chase initiates coverage of biotechnology firm Global Blood Therapeutics with an Overweight rating and a price target of $25. JPMorgan thinks GBT440 is a promising wholly owned asset targeting a broad and underserved market, as such current levels could provide an attractive entry point despite the relative lack of critical upcoming data.

GBT440-001 is a randomized, placebo-controlled, double-blind, single and multiple ascending dose study. This ongoing Phase 1/2 study is evaluating the safety, tolerability, pharmacokinetics and pharmacodynamics of GBT440 in both healthy subjects and adults with SCD. The study is being conducted in three parts: Part A (single dose administration), Part B (multiple dose administration, daily for 15 days in healthy subjects and 28 days in SCD patients) and Part C (multiple dose administration, daily for 90 days in SCD patients). Some patients in Part C have taken GBT440 for up to 6 months.

Results presented at ASH showed:

– All 41 SCD patients receiving GBT440 for up to six months have demonstrated a profound and durable reduction in hemolysis (red blood cell destruction) as assessed by hemoglobin, reticulocytes, and/or bilirubin.

– All patients taking GBT440 showed profound and durable reductions in irreversibly sickled cells compared with those taking a placebo.

Results from Part C (dosing for at least 90 days) demonstrate that among the 13 GBT440-treated patients:

– Patients treated with GBT440 for at least 90 days showed a clinically significant increase in hemoglobin (greater than 1 g/dL increase) compared with 14 placebo patients (46 percent vs. 0 percent; p=0.006).

Patients treated with GBT440 had a sustained reduction in irreversibly sickled cells compared with placebo-treated patients (-76.6 percent vs. +9.7 percent; p<0.001).- GBT440 was well tolerated up to six months of dosing. The most common treatment-related adverse events were Grade 1/2 headache and gastrointestinal disorders and occurred at similar rates in the placebo and GBT440 arms. There were no drug-related serious or severe adverse events. No sickle cell crises events occurred in study participants while on GBT440. Exercise testing data showed normal tissue oxygen delivery (no change in oxygen consumption compared to placebo).

– Absorption, Metabolism and Excretion of GBT440 a Novel Hemoglobin S (HbS) Polymerization Inhibitor for the Treatment of Sickle Cell Disease (SCD), in Healthy Male Subjects (Abstract #2487)

– Results of a study evaluating the pharmacokinetics, metabolism, and excretion of GBT440 given orally to healthy subjects showed that the drug was completely excreted from the body, with a half-life of approximately three days. This is much shorter than the lifespan of a red blood cell (about 120 days) of a healthy subject, suggesting that the binding of GBT440 to hemoglobin is a reversible process. The data also suggests that the pharmacokinetics of GBT440 are unlikely to be affected in patients with renal disorders.

Global Blood Therapeutics, Inc. is a clinical-stage biopharmaceutical company dedicated to discovering, developing and commercializing novel therapeutics to treat grievous blood-based disorders with significant unmet need.

GBT440 is Global Blood Therapeutics leading drug candidate which targets the underlying mechanism of red blood cell sickling and offers the potential to treat sickle cell disease (SCD) rather than only its symptoms.

Protalix Biotherapeutics For a Monster 180% Win!

February 11, 2017: Sell Protalix Biotherapeutics for a monster 180% win! This is our biggest winner to date. Long upper shadow and Inverted Hammer candlestick are usually good take profit signals. Congratulations if you made money on the trade.

December 27, 2016: Protalix Biotherapeutics announced today the confirmation of the recent letter of intent to purchase alfataliglicerase to treat Gaucher patients in Brazil by the Brazilian Ministry of Health. The Brazilian Ministry’s order consists of a number of shipments during 2017 for a total of approximately $24.3 million. Shipments are to start in mid-2017 and continue through the end of the year, in increasing volumes. The size of the final shipment of this order represents annual revenues of approximately $42 million.

Gaucher disease is a rare lysosomal storage disorder. Alfataliglicerase is a plant cell-expressed form of the glucocerebrosidase enzyme that was approved by the Brazilian National Health Surveillance Agency in March 2013 for the long-term treatment of adults with Type I Gaucher disease and in November 2016 for the long-term treatment of children four years of age and above with Type I Gaucher disease.

The Company owns all rights to alfataliglicerase in Brazil.

December 14, 2016: Protalix Biotherapeutics announced today that the Company received a letter from Fundao Oswaldo Cruz (Fiocruz), an arm of the Brazilian Ministry of Health (the Brazilian Ministry), detailing intended purchases by the Brazilian Ministry of alfataliglicerase to treat Gaucher patients in Brazil. The letter requests three shipments of alfataliglicerase; the first shipment to be made in the middle of 2017, and the last at the end of 2017. The Company estimates total revenues from these shipments to be approximately $24 million in aggregate.

Gaucher disease is a rare lysosomal storage disorder. Alfataliglicerase is a plant cell-expressed form of the glucocerebrosidase enzyme that was approved by the Brazilian National Health Surveillance Agency in March 2013 for the long-term treatment of adults with Type I Gaucher disease and in November 2016 for the long-term treatment of children four years of age and above with Type I Gaucher disease.The Company owns all rights to alfataliglicerase in Brazil.

November 29, 2016: The price target on Protalix Biotherapeutics was raised to $4 from $3.50 at H.C. Wainwright/Rodman & Renshaw. H.C. Wainwright also reiterates their Buy rating on Protalix Biotherapeutics.

Protalix is a biopharmaceutical company focused on the development and commercialization of recombinant therapeutic proteins expressed through its proprietary plant cell-based expression system, ProCellEx®. Protalix’s unique expression system presents a proprietary method for developing recombinant proteins in a cost-effective, industrial-scale manner.

Pharmaceutical Drug Pricing

Pharmaceutical drug pricing is all over the mainstream financial media right now. Let’s examine the macroeconomics of what is happening.

The demand for pharmaceutical drugs is inelastic. People that need a pharmaceutical drug prescribed by their doctor will demand that drug regardless of price. As the price of the drug goes up, demand mostly stays the same.

Notice how steep the demand curve is. This steep drop-off represents the inelastic demand for pharmaceutical drugs. The increase in supply from S to S1 leads to a relatively large decline in the price, but not much of an increase in quantity demanded.

Companies like Valeant Pharmaceuticals and former CEO Michael Pearson abused the inelasticity of demand for pharmaceutical drugs for maximum profit. If demand for pharmaceutical drugs is hardly influenced at all by price changes, then raise the price of the drug to a level that maximizes shareholder profits. Sure the supply curve may shift up a little from a drop in demand from people on the margin, but most of the public with their large health insurance providers will pay the higher price.

Pharmaceutical Drug Price Ceiling

Some are pushing for a pharmaceutical drug price ceiling. As you learned from the macroeconomic analysis of rent control, price ceilings do not work.

The horizontal brown line on the supply and demand graph below represents a drug price ceiling.

The lower price of the drug shifts the demand curve up a little to point b. However, suppliers will rapidly stop supplying the drug when they are forced to sell it below market price at point a. The difference between the quantity of the drug demanded and the quantity of the drug supplied is a drug shortage as represented by the red shaded area. People will die from a drug shortage when there are no readily available substitutes, and so the government should not attempt to use price ceilings.

Make Pharmaceutical Drug Demand More Elastic

The way to control runaway drug prices is to make the demand for pharmaceutical drugs more elastic. If people have choices and substitute drugs they can use, the steepness of the demand curve will be flattened and represent a more healthy free market as illustrated below.

Notice that the demand curve is flatter and not so steep.

How do you change the shape of the demand curve so that demand is more elastic? You make it legal for generic versions of drugs to come to market sooner. Gov. Charlie Baker is trying to do that by reducing the time it takes for the FDA to approve generic drugs.

Pharmaceutical drug makers have been fighting to preserve their inelastic demand pricing power by colluding to fix generic drug prices.

Folks, until all this drama gets worked out, I recommend staying away from pharmaceutical drug stocks.

Six IPOs Could Come Next Week

Last week was the biggest IPO week of the year with four companies launched. Next week could be even more significant as six companies are on the IPO calendar.

The IPO market is looking healthy. Below is a chart of the Renaissance IPO Index which is a market-cap-weighted basket of newly public companies.

The IPO Index chart shows the Twiggs Money Flow rounding up after a wicked Bear Trap in the wake of the September FOMC meeting.

Below are six IPOs which could launch next week. Until we get the initial IPO price, I don’t have an opinion on any of the IPOs listed below. With profitable IPO trading, it’s all about determining value using the initial IPO price.

COMPANY Ticker Industry Description
Everspin Technologies MRAM technology Develops and manufactures magnetic RAM
Obalon Therapeutics OBLN healthcare Gastric balloon technology
Advanced Disposal ADSW industrial Waste collection
AquaVenture Holdings WAAS consumer Provider of Water-as-a-Service solutions
Azure Power AZRE industrial Solar power
Coupa Software COUP technology Provider of cloud-based applications for finance

Hillary Clinton Has Something Wrong With Her Health

A big cover up is underway regarding Hillary Clinton’s health. Today, at the 911 memorial service in New York, Mrs. Clinton was rushed out of the area and into black SUVs from what looks like a seizure as she’s helped into the vehicle.

A mysterious piece of metal flings out of Hillary’s pant leg which could be from a necklace or jewelry that was broken during her seizures.

The mainstream financial media is reporting that Hillary Clinton was diagnosed with pneumonia and that she got “overheated”. I’m not buying it.

The temperature in New York never got over 77 degrees today so how does someone “overheat” in that temperature unless they are doing extremely rigorous exercise?

There’s an ongoing cover-up about Hillary Clinton’s health. We have video proof of Mrs. Clinton having seizures.

William Ramsey did an educational video about Hillary Clinton’s seizures.

Folks, we have a right to look at Hillary Clinton’s health records before the Presidential election. Employers are allowed to send potential employees to OSHA for health and physical tests before hiring them. Why should the office of President be any different? If we the people are the employer, we should have the right to send Hillary Clinton to OSHA for a standard set of physical testing.

I’m so sick and tired of these rich and powerful people acting like our masters and we are treated like slave peasants. We are considering employing Hillary Clinton in the highest office in the land. We have the right to demand that she be sent to OSHA for testing. Instead, all we get are lies in the media and a massive cover-up.

Below is video from a doctor who makes a powerful case that Hillary Clinton might have Parkinson’s disease.