The biggest story in the financial markets right now is Allergan, one of the most celebrated biotechs on Wall Street. As recently as last month the company had an $80 billion market capitalization and traded at over 16x run-rate EBITDA. The Street celebrated its stellar management team and vaunted pipeline. Meanwhile, Shock Exchange pointed out how growth was dead and Allergan was under siege by generics rivals like Mylan and Teva. Allergan transferred patents for Restasis its blockbuster dry eye treatment to the St. Regis Mohawk Tribe to protect it from an inter partes review.

Judge William Bryson, who presided over the federal patent case, questioned whether the Mohawk deal was sham. The unusual patent defense seemed to be an attempt to subvert the entire patent system. Judge Bryson called Allergan out and the Shock Exchange warned investors to brace themselves for generic Restasis:

Given Allergan’s Catch 22 I mentioned earlier, I believe this risk of the company losing the federal case might have risen. If lawmakers abrogate the Mohawks’ sovereign immunity in federal cases it could eliminate that argument. Drawing the judge’s ire might not be a winning strategy either. Jacob Sherkow, a professor at New York Law School, helped frame the matter:

… In my opinion, these developments could increase the likehood that Allergan loses the federal patent trial. I believe AGN bulls should brace themselves for generic restasis. Restasis represents 9% of revenue and 15% of Allergan’s income. According to the IMS institute of healthcare informatics, from 2002 to 2014 the price of medicines was reduced by 51% in the first year generics entered the market. A loss of market share to generics and/or Shire’s xiidra could amplify that decline.

Judge Bryson invalidated the Restasis patents earlier this week. Wells Fargo’s David Maris now predicts a generic version of Restasis could be here in 2018, much earlier than expected:
Allergan analyst commentary at Wells Fargo Allergan price target lowered to $258 from $276 at Wells Fargo. Wells Fargo analyst David Maris lowered his price target for Allergan shares to $258 after a federal judge on Monday invalidated several patents covering the company’s dry-eye therapy Restasis. Given the FDA’s public push to expedite approvals of complex generic products, a generic could receive approval prior to the conclusion of the appeal process, while an ”at risk” launch is possible, Maris tells investors in a research note. The analyst has changed his view from assuming generic Restasis in 2019 to 2018.
The Shock Exchange continues to give investors December’s news in October. AGN has fallen nearly 20% since the controversial patent sale was announced. Will the stock plunge his $95 sum-of-the parts valuation? Let’s see if Maris co-signs that.

 

 

On Shock Exchange

Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead explains the stock market and U.S. economy through the eyes of the New York Shock Exchange, a financial literacy program Ralph Baker started in 2006 to share his passion for investing and basketball with his 11-year-old son and other boys his age. The book predicts the “pain ahead” for the U.S. economy, the demise of China, the pending stock market crash and social unrest.

Shock Exchange has been trumpeted by President Obama, the Senate Finance Committee and House Ways and Means Committee. However, they conveniently forgot to cite the source. Critics try to make and unmake authors, but the market always decides. The book was also recently added to Trump Syllabus K12, crafted by Dr. Kaye Wise Whitehead of Loyola University Maryland. Shock Exchange is the best book on Wall Street in the past 20 years, and on economics, it may be the most important book since the Great Depression.

On Trump And the Global Economy

Shock Exchange is also the only book from a black author that speaks to Donald Trump, his rise to power, and gives incite into how he will eventually lead as president. The book prompted the popular town meeting, Trump And The Global Economy. The town hall brings together a cross-section of individuals to discuss everything from President Trump’s policies on economics, immigration and foreign affairs to what his election actually says about America. There have been several events pursuant to “resisting” Trump, but the Trump And The Global Economy gives to give the public real information, seek new directions and solutions from professionals and everyone on the front lines.

 

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