• The top 10 best selling drugs in 2018 generated $90 billion in revenues for large pharma companies
• This comes at a time when many of the top drug makers are facing pressures about drug pricing

AbbVie’s (NYSE:ABBV) arthritis drug Humira remains the best selling drug in the world with over $20B in sales, more than double the second place Eliquis.

Combined, the top 10 best selling drugs in 2018 generated over $90B in revenues. Many of the drug developers, including Bristol-Myers Squibb (NYSE:BMY) and Merck (NYSE:MRK) are facing scrutiny for pricing drugs north of $100,000/year in the USA when in other countries the same drugs sell for a fraction of the costs.

Article by: Mick Ross
Mick is currently a full-time investor and formerly a buy-side analyst (2yrs) covering healthcare companies. Before that, he was a salesperson at a bulge-bracket firm, based in Dallas, Texas. Mick blogs to clarify and synthesize his investment thought process and to elicit feedback; additionally he likes to connect with other investors and swap ideas.

• Leafly released a report that projects cannabis jobs to more than double by 2020, outpacing workforce gains in other industries

According to Cannabis Jobs Count report by Leafly, there are now more than 211,000 cannabis jobs across the United States. More than 64,000 of those jobs were added in 2018, a 44% increase over 2017. In 2017, the number of cannabis jobs grew 21% over 2016.

The report states that the rapid job growth will continue in the cannabis space. 2019 will show cannabis jobs to increase at least another 20%. That would be more than 250,000 people employed in the cannabis industry.

The report forecasts that cannabis jobs will grow by 110% from 2017 to 2020. In comparison, the Bureau of Labor Statistics forecasts that the fastest-growing employment figures over the next 10 years will be in:

• Home health care aides: expected to grow 47%.
• Wind turbine technicians: expected to increase 96%
• Solar voltaic installers: expected to grow 105%.

Amazingly, these gains reported by Bureau of Labor Statistics are projected to happen over the course of 10 years, while cannabis’ 110% growth will be 3 years.

What Is Funding This Growth?

34 states have legalized the use of medical cannabis, of which 10 states and Washington, D.C., have legalized the adult use of cannabis. As a result, legal cannabis sales increased 34% nationwide in 2018, to $10.8 billion. This has contributed to the growth of several cannabis giants like Canopy Growth (NYSE:CGC) and Aurora (NYSE:ACB)

Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.

• Gene-editing technology CRISPR is being tested in disease settings where vaccines are currently not effective
• Although years away from market, early data shows promise

Vaccines work by jump-starting the immune system’s B-Cells to manufacture specific antigens, our body’s defense mechanisms against particular viruses.

Naturally, the body’s immune system will manufacture B-cells when there is a foreign virus that comes from a vaccine or natural infection. Once the body realizes the foreign virus, it produces the virus-matching antigen that can destroy the invader.

An issue arises when the foreign virus has DNA that the body cannot replicate or when the DNA is constantly changing. This is because the B-cells cannot manufacture the required antigen needed to fight the foreign virus. As a result, vaccines are limited or ineffective in people with compromised immune systems (old people), or when someone catches a viral disease that has no vaccine antigen. Examples here are viral diseases and the flu.

Scientists are now testing CRSIPR, a gene-editing technology, in the hopes of turning the immune system against viruses for which there are no vaccines. B-Cells are being engineered to program the defense mechanism to produce and keep producing whichever antibody is needed to fight the foreign virus.

In simple term, CRISPR is being used to nudge B-cells to produce the right antibody needed to fight the disease. The hope is that CRISPR could edit B cells that could produce immunity against diseases where traditional vaccinations fail. CRISPR may be able to manufacture a better equipped B-cell capable of fighting off diseases better than traditional vaccines.

However, there are hurdles that must be overcome. For starters, CRISPR will not replace traditional vaccines due to the high costs. CRISPR is used to modify patients’ B-cells individually (patient by patient). A “mass manufacturing” CRISPR approach would be rejected by our immune system. This makes vaccines, by comparison, are cheap. Secondly, the approach will have to be tested in human clinical trials for years before being commercial. The probability of failure in these clinical trials is high.

Three companies developing CRISPR and gene editing technologies are:

1. CRISPR Therapeutics (NASDAQ:CRISPR)
2. Sangamo (NASDAQ:SGMO)
3. Editas Medicine (NASDAQ:EDIT)

Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.

• Healthcare spending will rise by 5.5% annually over next decade as more people get on Medicare
• In order to cover these added costs, governments will be pressured to raise taxes and private insurers to raise premiums
• Investors of insurance and healthcare companies will benefit from increase in spending

Government health agency, Centers for Medicare & Medicaid Services (CMS), estimates that US health spending will reach $6T over the next decade. From 2018 – 2027, health spending is expected to increase annually by an average of 5.5% every year. This adds up to health spending that will be 70% higher in 2027 than it is today.

Rising income levels, better employment rate and more people enrolling for the federal health insurance program Medicare will cause healthcare spending to rise to 19.4 percent of the U.S. economy by 2027. In 2017, this figure accounted for 17.9% of the US GDP.

What does this all mean?

Well, approximately 47% of the health spending will be funded by government, compared to 45% in 2017. This additional money will have to be sourced from somewhere. The government will be left with two options to cover the higher spending: higher taxes or go into further debt. The likeliest scenario will be a combination of both.

The remaining 43% of health spending will be funded by private insurance companies. That is approximately an extra $1T in spending for insurers, who will likely raise premiums to cover the costs.

Who stands to benefit most?

Increases in healthcare spending will benefit insurers and healthcare companies. With the industry expected to increase by an average of 5.5% annually, the market remains healthy for investors in the following names:

Insurance Companies

1. UnitedHealth Group (NYSE: UNH)
2. Humana (NYSE: HUM)
3. Berkshire Hathaway (NYSE: BRK.B)

Healthcare Companies

• Amgen (NASDAQ: AMGN)
• Merck (NYSE: MRK)
• Bristol Myers Squibb (NYSE: BMY)

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.

• California, the world’s biggest cannabis market, legalized the drug in 2016
• Tax from cannabis is growing each quarter and expected to hit $1B within 3 years

California, the world’s biggest cannabis market, generated $300 million in taxes in its first year of commercial legalization. Legalized in 2016, sales of cannabis began in January 2018. The government collects a sales tax (8.75%), a state excise tax (15%) and a cultivation tax ($9.75/oz). Even with these heavy tax burdens, consumers are buying the plant and in growing numbers.

Quarterly sales in the first year of commercial activity are growing from $80M in Q2 2018 to $103M in Q4.

At this current pace, Califronia is expected to generate $1B from cannabis tax revenue by 2021.

Other states which also legalized cannabis from the prior prohibition have also started gathering tax revenues. Commercial sales got started first in July 2017 in Nevada and fall 2018 for Massachusetts.

Massachusetts may collect $60 million in its first year, which is ongoing. Nevada collected $69.8 million in its first year. Those are tiny fractions of California’s tax total, because California’s sheer size.

With leniency seeming to catch on nationwide, cannabis producers like Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB) are well positioned to supply the increase in demand.

Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.

• Roche was the best selling oncology company of 2018, with double the sales of second place Celgene
• Bristol Myers Squibb acquired Celgene in early 2019, which will likely create the largest cancer company

Roche (OTC:RHHBY) generated over $25B in oncology sales for 2018 due to billion dollar drugs such as Rituxan, Herceptin and Avastin. Roche, however only saw a 2% growth in sales over 2017, which could indicate that its time as the top selling oncology company may be nearing an end.  

Celgene, was in second place thanks to their blockbuster Revlimid, which is also the best selling cancer drug worldwide. Their oncology division grew sales at 17% over 2017.

In January 2019, Bristol Myers Squibb (NYSE:BMY) announced a mega-deal to acquire Celgene in a $74B deal. BMY was in 4^th spot in 2018 due to the rise of immue-oncology Opdivo.

Combined, the two companies are expected to overtake Roche as the number 1 selling cancer company globally, as early as 2019.

Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.

• For 5^th year in a row, e-cigs were most popular product amongst high school students, erasing all the progress made to lower smoking rates.

There’s a growing epidemic of tobacco products currently used by children — 4.9 million high school and middle school kids used tobacco products in 2018 up from 3.6 million in 2017 — mainly due to a growth in e-cigarette usage. 1 of every 5 high school students (20.8%) reported in 2018 that they used electronic cigarettes in the past 30 days—an increase from 1.5% in 2011.

For the fifth year in a row, e-cigs were the most popular product amongst high school students. 20.8% of US high school students are using e-cigs, followed by cigarettes at 8.1%, cigars at 7.6%, smokeless tobacco at 5.9%, hookah at 4.1%, and pipe tobacco at 1.1%.

Overall, 27.1% of all high school students use a tobacco product in 2018.

While e-cigs don’t have the heavy carcinogenic toll that traditional cigarettes do, they do have high levels of addictive nicotine. One vaping pod can equal roughly one pack of cigarettes for nicotine.

The Juul, made by PAX Labs, became the most popular e-cigarette in the United States and has a market share of ~70%. Its rise in popularity is a main reason why smoking rates are up among American youth. In December 2018, Juul maker received $12.8 billion in funding from Altria, the maker of Marlboro, in exchange for 35% of the company. This valued PAX Labs at $36B, led by Juul’s annual revenue of about $2B. 

Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.

• Aurora Cannabis saw revenues rise 4x and claimed a strong market share that detailed the first quarter of legal recreational-pot sales in Canada, but also showed off large losses and a shrinking margin.

In Fiscal Q2 2019, for the three months ended December 2018, Aurora Canabis (NYSE:ACB) accounted for 20% all marijuana sold across Canada since the drug was legalized last October.

The company revenues surged to C$54.2 million, more than quadrupling from the same time last year. However, due to costs of ramping up its production and distribution operations, ACB reported lower margins and a quarterly loss of C$237.8 million.

Investors are hoping that economies of scale and an improving retail infrastructure in Canada will result in higher margins for Aurora Cannabis. The company is now shipping marijuana to more than 20 countries, with the latest being the United Kingdom.

Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.

• The Canadian marijuana company is investing up to $500M into US CBD market after receiving a license from NY
• With the US market currently fragmented, Canopy is positioned to be a major player in the largest global market

Canopy Growth (NYSE:CGC) (TSX:WEED), the Canadian cannabis company, is planning to increase investment in the US hemp market to $500M after adding hemp production in Rhode Island and 2-3 other US states. The company first announced an investment of $100 million to $150 million to process and produce hemp in New York after securing a license from the state’s government officials in January.

The move to invest in a hemp processing facility in New York represented the company’s first large push into cannabis extraction and processing outside of Canada. The timing works out well for Canopy given that the US cannabis market is highly fragmented. The seven largest publicly traded U.S. cannabis operators captured 6% of market share, leaving space for Canadian companies to enter.

Canopy has also been bolstering its US position through acquisitions. The company bought Evergreen, Colorado-based cannabis research startup ebbu in November 2018 for $330 million and gained control of more than 40 cannabis-related patent filings.

Canopy said the intellectual property it gained from the deal gave the company the potential “to vastly reduce the cost of CBD production.” Those cost savings could prove even more important as the company’s focus on hemp production becomes a more significant part of its business moving forward.

Article by: Mick Ross
Mick is currently a full-time investor and formerly a buy-side analyst (2yrs) covering healthcare companies. Before that, he was a salesperson at a bulge-bracket firm, based in Dallas, Texas. Mick blogs to clarify and synthesize his investment thought process and to elicit feedback; additionally he likes to connect with other investors and swap ideas.

• In an attempt to overtake Amazon’s AWS in the cloud market, Microsoft is updating the archaic ways healthcare records are shared

Microsoft (NASDAQ:MSFT) is using their cloud platform Azure to move large amounts of patient data to the cloud. This service will offer clinicians, individuals and researchers a more comprehensive view of patient health in one database, instead of having it scattered.

Health care lags behind some other industries in moving data to internet-based storage, and while health records have mostly gone digital, they are often stored in different databases that can’t share information easily. That makes it hard to create systems that use new artificial intelligence and data analysis techniques to track patient well-being and find new targeted therapies.  A better-connected health-care system would provide clinicians with more complete profiles of their patients, researchers with more data to study and individuals with more information to take control of their health, according to Microsoft. 

The tool will use Microsoft’s Azure cloud platform and a national standard for exchanging health records to have health systems communicate with each other. For example: hooking up patient records with pharmacy systems, fitness devices and others more seamlessly.

This is MSFT latest attempt to grow its’ cloud business and compete with Amazon’s AWS (NASDAQ:AMZN) over market leader status.