Oligopolies and Monopolies

The Trump Administration is following the playbook of Reaganomics. As part of its Reaganomics program, the Reagan Administration cut back sharply on the regulation of everything from monopoly and oligopoly to pollution and product safety, important elements that likewise effect the aggregate supply curve.
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More Evidence Tech Pullback Is Just Reversion To Mean

The sell-off in technology is more about market reversion to the mean than it is indicative of some gloom and doom scenario where technology stocks lead the rest of the market lower.

Credit Suisse just released a report to clients where they are neutral to slightly cautious on technology stocks for the next 3 months, but remain positive longer out.

There are many bottoms-up drivers in the technology sector right now including the new iPhone, continued increase in cloud usage, greater adoption of artificial intelligence across various sectors, and autonomous driving. Technology adoption and market penetration are likely to increase over the next couple of years.

The S&P 500 is dominated by a few big tech companies. Innovations such as more automation in the grocery industry from Amazon, the iPhone 8, and Tesla’s Model 3 are catalysts for the S&P 500 to move even higher.

Reversion To The Mean

The green line is what I would calculate the mean to be at. As you can see, QQQ has overshot the mean over the last few months and so a move back towards the 10 year mean line is normal.

Fiscal policy will also be a catalyst for continued growth such as tax reform. The medical device tax, investment tax, tanning tax, Medicare Hospital Insurance surtax, the health insurance fee and tax on brand pharmaceutical manufacturers, all will likely be repealed at some point in the future.

Credit Suisse set negative expectations for consumer goods. Stocks that trade in the consumer goods sector are likely going to be stocks we should avoid. Fundamentals and valuation are likely to continue to deteriorate in clothing, department stores, grocery, and packaged food.

Adamis Pharmaceuticals Gets FDA Approval, Stock Explodes Higher!

Trader alert: Adamis Pharmaceuticals explodes higher on FDA approval of Epinephrine injection. Adamis Pharma announces FDA approval of its EPINEPHRINE INJECTION for the emergency treatment of allergic reactions (Type I) including anaphylaxis; anticipates launching in the back half of the year.

This will be a low cost alternative to Mylan’s EpiPen. The epinephrine-products market generated about $1.2 billion in sales last year so this is big news folks. This little pharmaceutical company could explode higher over the coming year.

Adamis Pharmaceuticals said, “With an anticipated lower cost, small size and user-friendly design, we believe Symjepi could be an attractive option for a significant portion of both the retail (patient) and non-retail (professional) sectors of the epinephrine market. We are currently in the process of exploring all of our commercialization options and in discussions with potential partners in order to facilitate broad patient access to this new epinephrine treatment option and to maximize the value of our important asset. In the interim, we expect to build inventory levels in preparation for an anticipated launch in the second half of this year.”

Founded in 2006 and headquartered in San Diego, Adamis Pharmaceuticals Corporation is a specialty biopharmaceutical company that provides high quality, low-cost solutions for patients, physicians, and healthcare organizations in the multi-billion dollar therapeutic areas of respiratory disease and allergies. Adamis Pharmaceuticals lead pipeline product is an epinephrine injection pre-filled syringe product for potential use in the emergency treatment of anaphylaxis. Adamis is also currently developing other specialty pharmaceutical product candidates including APC-1000, an HFA inhaled nasal steroid product for the potential treatment of asthma; APC-2000, albuterol with a dry powder inhaler (DPI) propellant for the potential treatment of bronchospasms, and APC-4000, fluticasone with a DPI propellant for the potential treatment of asthma. With the rising costs of healthcare in recent years, Adamis has been focusing on creating low-cost therapeutic alternatives in large markets in order to grow its business and to make treatments more affordable for more people. Adamis will pursue the 505(b)(2) regulatory approval filings with the FDA whenever possible in order to minimize costs and shorten the time to market. With its lead pipeline product and specialty pharmaceutical pipeline, ADMP is poised to become a leader in the specialty biopharmaceutical industry.

Adamis Pharmaceuticals Stock Chart

ADMP presents a decent setup pattern. Prices have been consolidating lately. There is a very little resistance above the current price. We notice that large players showed an interest for ADMP in the last couple of days, which is a good sign.

GO HERE TO CHART LARGE PLAYERS AND THE TWIGGS MONEY FLOW LIKE THE CHART ABOVE… AWESOME TOOL

Teligent FDA Approves Clobetasol Propionate Gel

March 8, 2017: Teligent announced it has received approval of the Company’s abbreviated new drug application (ANDA) from the U.S. Food and Drug Administration (FDA) of Clobetasol Propionate Gel, 0.05%. This is Teligent’s second approval for 2017, and its thirteenth approval from its internally-developed pipeline of topical generic pharmaceutical medicines.

Based on recent QuintilesIMS Health data from January 2017, the total addressable market for this product is approximately $10.9 million.

March 06, 2017: Teligent announced it has received approval of the Company’s abbreviated new drug application (ANDA) from the U.S. Food and Drug Administration (FDA) of Triamcinolone Acetonide Ointment USP, 0.5%. This is Teligent’s first approval for 2017, and its twelfth approval from its internally-developed pipeline of topical generic pharmaceutical medicines.

Based on recent QuintilesIMS Health data from January 2017, the total addressable market for this product is approximately $4.4 million.

January 03, 2017: Biotechnology firm Teligent announced it has received approval of three of the Company’s abbreviated new drug applications (ANDAs) from the U.S. Food and Drug Administration (FDA) of Nystatin and Triamcinolone Acetonide Ointment USP, 100,000 units/gram and 1 mg/gram, Clindamycin Phosphate Topical Solution USP, 1% and Flurandrenolide Ointment USP, 0.05%. These approvals were received on December 30, 2016, and brings Teligent’s total approvals from its internally developed pipeline of topical generic pharmaceutical products in 2016 to nine.

November 30, 2016: Teligent announced it has received approval of the Company’s abbreviated new drug application (ANDA) from the U.S. Food and Drug Administration (FDA) of Clobetasol Propionate Lotion 0.05%. This is Teligent’s sixth approval from its internally developed pipeline of topical generic pharmaceutical products.

Based on recent IMS Health data from October 2016, the total addressable market for this product is approximately $19.5 million. Teligent originally submitted this ANDA to the FDA in September 2015.

Jason Grenfell-Gardner, President, and CEO said, “Teligent received FDA approval for Clobetasol Propionate Lotion 0.05% in just less than fifteen months from our original submission date in September 2015. This is our second product approved from our pipeline of applications filed in Generic Drug User Fee Amendments (“GDUFA”) Year 3, which began on October 1, 2014. Teligent now has two products which have been approved by the FDA in a first round review, which exceeds current industry average review time periods published by the FDA in October of 2016. This is our thirteenth product in our domestic portfolio, and our commercialization team expects to launch this product in the first quarter of 2017.”

Teligent, Inc., a specialty generic pharmaceutical company, develops, manufactures, and markets topical formulations in the United States.

Biotechnology Won Big On Election Night Here’s Why

Hillary Clinton and Democrats promised to wage war on pharmaceutical companies and do things like price controls on drugs and products of the biotechnology industry.

In California, there was a ballot measure to impose price controls on the sale of pharmaceutical drugs in the state.

Both Hillary Clinton’s probability of winning, and California’s ballot measure to impose price controls on the sale of drugs, weighed on pharmaceutical and biotechnology stocks leading up to the election.

Donald Trump did not promise a war on pharma. Trump promised increased funding for research and development and modernizing the FDA to ease the development, commercialization, and costs of bringing life-saving drugs to market.

Donald Trump won, and biotech stocks have been rallying ever since.

Democrats created shortages in the health care industry with ObamaCare, and they almost created the same shortages in pharmaceutical drugs. Let’s look at why price controls create market shortages.

Price Control

A price control (or a price ceiling) occurs when the government puts a legal limit on how high the price of a product can be. For a price control to be effective, it must be set below the natural market equilibrium.

Using a hypothetical perfectly competitive market called pharmaceutical drugs, let’s examine the microeconomics of price control.

When a price control or price ceiling is set, a shortage occurs. The red horizontal line markets the price ceiling that is set by the government.

The price control forces the price down from P to P2. At the lower price, more people can afford the drug and so the quantity of the drug demanded goes up from Q to Q2 (point A).

The suppliers of the drug (pharmaceutical company) immediately cut back on supply (point B) as they are now paid below what the equilibrium market price established. Instead, these suppliers focus on supplying most of their drugs to other consumers, perhaps in other states that pay the full market price for the drugs they make. A shortage is created by the difference in the quantities of drugs demanded, versus the quantities of drugs supplied as illustrated by the shaded area. Shortages within the pharmaceutical industry would likely result in deaths, depending on the drugs needed.

The government set a price ceiling of P2 and so quantity supplied contracted to point B. However, at that supply level, consumers would be willing to pay a price of P3. Since P3 is greater than P2, deadweight loss occurs. The deadweight loss is the elimination of trading between both suppliers and consumers.

Price controls are a bad idea. If the government sets a price ceiling, there will be a shortage.