December 30, 2015
Last January, we featured our annual Top Picks report, highlighting the favorite stocks from the leading newsletter advisors. Here, we talk with one of 2015’s top performers, Jay Silverman of the Medical Technology Stock Letter. Last year, he selected two biotech stocks and they have risen 33% and 41%.
Steven Halpern: Our guest today is Jay Silverman, biotech sector expert and editor of the industry leading the Medical Technology Stock Letter. How are you doing today, Jay?
Jay Silverman: I’m great, thanks Steve.
Steven Halpern: Now this is part of a special series in which we’re reviewing the best performers from our top pick special from 2015, which appeared on MoneyShow in January. You contributed to picks to last year’s report and both have been extraordinary. Let’s start with Novavax (NVAX), which is up 41%. Can you remind our listeners about your original rationale for picking this stock?
Jay Silverman: Absolutely. Novavax is the maker of Novel vaccine and the product in particular here was for a virus called RSV, which is very similar to the flu, but affects both infants and newborn, as well as the elderly.
Novavax has an RSV vaccine, which today looks like it will be the very first RSV vaccine ever approved in the US or anywhere around the world. That theme held not only sound to our January outlook, but around mid-year things even got better when the elderly trial was successful and the company showed that it could be actually created to be an annual vaccine like a flu vaccine.
That accelerated the program, and since that, in 2015, they’ve already initiated a large 11,000 or 12,000 patient phase 3 trial, which after this current season is completed and the vaccine should be approved probably by 2017 or 2018 at the earliest, so that’s had a very, very good fundamental story.
Steven Halpern: Now, over the course of the year, the stock has been very volatile. Is that just something people should expect with biotech companies and is that something you’re just comfortable riding through?
Jay Silverman: Clearly we like to ride these through because the company’s fundamental story has not only stayed intact, but actually improved. The market, as you are aware of, around the middle of August and into the second half of the year went away from biotech after a three or four-year rally.
And so the valuations, which had peaked in July, have been under pressure, including Novavax, despite all of the fundamental progress I mentioned. As you know, we have 12-to-18-month target on our initial recommendations, but usually a good idea in biotech should be held for a two-to-four-year period.
Steven Halpern: You second top pick in our 2015 special was The Medicines Company (MDCO), which is also showing a very strong gain up 33%. Could you review your original basis of that recommendation?
Jay Silverman: Sure. The Medicines Company was basically in a transition period from reliance on a soul drug called Angiomax, which had come under some patent disputes—and possibly going generic—and that was reflected in the stock.
…read more or listen to the full interview