Opioid Daily Report (8/15)

Traditional Media Coverage

1. How to Make Money off America’s Opioid Epidemic

   Aug 14, 2017 | Nanalyze

   By Staff
   
   
   If the title of this article made you a bit uncomfortable, it certainly should. The amount of prescription pain killers used by Americans is beyond staggering. According to an article by CNBC, “80 percent of the global opioid supply is consumed in the United States” and in 2015 “300 million pain prescriptions were written” totaling a $24 billion market. So many people are on prescription painkillers now that more Americans use them than tobacco:
2. Opioid firms must clean up their mess (OPINION)

   Aug 14, 2017 | Bucks County Courier Times

   By Mike DeWine
   
   
   Felicia Detty loved with all her heart. Growing up in southern Ohio in the rural village of Frankfort, she earned the nickname "Bug" because she gave the best hugs. Her dad was her best friend, and her daughter, Averie, was the love of her life.
3. D.A. Crump announces major opioid-fighting initiative

   Aug 15, 2017 | News Channel 9 (ABC)

   By WTVC
   
   
   District Attorney Steven Crump of the 10th Judicial District has announced a major initiative to fight the opioid epidemic.

Broadcast Media Coverage

4. Fox 43 News in the Morning

   Aug 15, 2017 | WTNZ (Fox)

   By Knoxville, TN
   
   
   there are plans to hold a memorial for the to man in virginia well in the last five days eleven people have died of suspected drug overdose in knox county that brings the total number of deaths this year or t hundred and ten the district attorney general estimates there wer two hundred twenty four overdose dehs in all of last years up three fm a previously rorted number that number couldontinue to hange to as autopsy reports are revised and finished we are on track to almos double last month just for months to month rolled lawnorced and plays is to hit the dealers at the folks that are prescribing wrongfully these hope you its and are communies general allen worries that the crisis could still get worse before it gets any better her office estimates we could hit three hundred overdose deaths befe the endf the year fellow east tennessee district attorney geral steve crump i now joini the fight against opioid yesterday he annnced plans to join a lawsuit with other area attorney general's that suit seeks civil damages from pharmaceutical comnies believed to have brokeen laws tied t the opioid crisis

Traditional Media Coverage

1. How to Make Money off America’s Opioid Epidemic

   Aug 14, 2017 | Nanalyze

   By Staff

   If the title of this article made you a bit uncomfortable, it certainly should. The amount of prescription pain killers used by Americans is beyond staggering. According to an article by CNBC, “80 percent of the global opioid supply is consumed in the United States” and in 2015 “300 million pain prescriptions were written” totaling a $24 billion market. So many people are on prescription painkillers now that more Americans use them than tobacco:

   Investors have been making a killing here – literally. In light of President Trump’s war on the opioid abuse problem, it’s now time for everyone to get on the other side of this trade. We see two parts to this investment thesis:

   Investing long in those stocks that benefit from selling drugs that help people overcome their addictions

   Selling short those providers of opioid pain killers.

   That last bullet point shouldn’t even be a part of an investment thesis. Have Americans never thought about finding out who sells all these pills and telling them to fcuk off out of their country? Why don’t we direct all our constant outrage over the growing list of “phobias” and “isms” at the companies that our poisoning our people? Who knows what people are thinking, but while collective America tries to get their act together, we’re going to figure out how to make some money off the whole thing. First, let’s find out who is selling the drugs in the first place.

   Let’s go back to that CNBC article which states:

   Based on 2015 sales, the top five opioid products were made by Purdue Pharma, Johnson & Johnson, Insys Therapeutics, Mylan and Depomed, according to EvaluatePharma, a life sciences market intelligence firm, which tracks sales.

   This information can’t be that outdated already, so who are these companies that are poisoning America providing relief for those who suffer from pain:

   ·         Purdue Pharma L.P. – Privately held pharmaceutical company. In 2007 it paid out one of the largest fines ever levied against a pharmaceutical firm for mislabeling its product OxyContin, and three executives were found guilty of criminal charges. Arguably the biggest player there is and responsible for OxyContin that started it all.

   ·         Johnson & Johnson (NYSE:JNJ) – One of our favorite DGI stocks. They’ve been named in four lawsuits alleging claims related to marketing of opioids, including DURAGESIC (this is fentanyl people, 1000X stronger than heroin), and NUCYNTA. Looks like they sold NUCYNTA for nearly $1 billion to our next company.

   ·         Depomed (NASDAQ:DEPO) – This $398 million pharma company sells nothing but pain killers, and NUCYNTA generates about 65% of their revenues. Nearly 5% of their revenues come from a fentanyl nasal spray. Recently increased their “pain salesforce” from 190 to 258 with NUCYNTA as their primary focus.

   ·         Mylan (NASDAQ:MYL) – This $16.5 billion pharma company is perhaps best known for their controversial pricing of the EpiPen, anything to distract from the fact that they were the first company to market fentanyl patches (the ones that addicts like to suck the fentanyl out of). Last month they received a subpoena from the U.S. DOJ relating to opioids sold from 2013 to 2016. Since they sell over 7,500 products, revenues from opioid products like these fentanyl patches are all but impossible to discover.

   ·         Insys Therapuetics (NASDAQ:INSY) – This $650 million company sells nothing but fentanyl under the brand name SUBSYS which brought in $242 million in sales for 2016. Just last month, they launched SYNDROS which is like a liquid form of Marinol (essentially cannabis in pill form). SUBSYS is the first and only fentanyl sublingual spray for “breakthrough cancer pain”. The product page just makes us feel uncomfortable. It should just say “how to convince your doctor to make you an addict” and “get your road to addiction savings card today“:

   ·         Teva and Cephalon (NYSE:TEVA) – Teva is a $17 billion generic drug manufacturer that wasn’t on our original list but we uncovered them during our research. About 6 years ago, Teva bought Cephalon. At the time of the acquisition, Cephalon was raking in nearly $200 million a year selling fentanyl in pill form (FENTORA) and another $116 million selling fentanyl lollipops (ACTIQ). Fast forward to today and the impact of selling fentanyl on the more than $20 billion in revenues that generic drug manufacturer Teva brings in is no longer disclosed.

   While those are just 6 players that are making money of opioids, there are probably a lot more companies out there. From an investor’s perspective, we want to know who will be impacted if there is a clampdown on opioid sales. Companies like JNJ, TEVA, and Mylan are just too diversified for an opioid clampdown to have any meaningful impact on their bottom lines.

   Just last week, it was said that the Drug Enforcement Agency is mulling a 20% reduction in opioid painkiller manufacturing. Here’s who the main targets are said to be:

   ·         In a proposal released on Friday, the agency noted a main target for the reductions are oft-prescribed painkillers such as oxycodone, hydrocodone and fentanyl — the active ingredients in Purdue Pharma L.P.’s OxyContin, Janssen’s Duragesic and the extended release version of Pernix Therapeutics’ Zohydro, respectively, as well as a variety of other branded products.

   We see mention made of a pharmaceutical company called Pernix:

   ·         Pernix (NASDAQ:PTX) – This $27 million company sells an extended release form of hydrocodone under the brand name ZOHYDRO ER. This drug account for about 18% of total revenues or around $24 million a year. They have developed a technology called BeadTek which turns the hydrocode into a viscous gel if you crush it or dissolve it in liquid (prevents snorting and mainlining).

   Lastly, we came across a few more names from the lawsuit filed by the State of Ohio against 5 drug companies for ‘Fueling the Opioid Epidemic‘. Ohio has reason to be concerned. According to Vice News, between 2011 and 2015, 3.8 billion opioid pills were prescribed in Ohio to roughly 20 percent of the state’s population. This lawsuit uncovered a few additional names as follows:

   ·         Endo International (NASDAQ:ENDP) – This $1.7 billion generic drug manufactrurer has about 28% of their revenues tied to opioids. In June of this year they pulled their opioid painkiller OPANA from the market per a request by the FDA. They had already sold $67 million of it in the first half of 2017. They also sell PERCOCET (oxycodone) which brought in $61 million for the first half of 2017.

   ·         Allergan (NYSE:AGN) – With a market cap of $78 billion, Allergan sells morphine under the brand name KADIAN along with loads of other non-opioid products. Not surprisingly there is no information about their sale of opioids in the company’s latest 10-Q except 5 mentions of the word in reference to their being sued.

   So let’s look at what positions we can take for the publicly traded companies. You’d have to be on some pretty heavy painkillers to short JNJ so that’s out. While they don’t say how much Janssen makes off of DURAGESIC, we can only assume it has minimal impact to the bottom line of a $357 billion company. Then there’s Depomed. Since NUCYNTA is considered to be a “gentler” form of opioid, it may fall under the radar of the DEA crackdown. Mylan has a product line that is too diverse for an opioid crackdown to have a meaningful impact it seems, though we can’t tell for sure. Given that Insys sells nothing but fentanyl at the moment, they’re probably the best option of the bunch for shorting based on the “DEA crackdown thesis”. While Teva also sells fentanyl, they’re just too big and diversified for any sort of crackdown to have an effect on their bottom line. Pernix could be affected by a crackdown though opioids only represent 18% of their revenues. Given that Endo already lost -53% of their share price value year-to-date, the impact of an opioid crackdown may already be priced in. Allergan is just too big and diversified to be affected by any crackdown.

   Now that we’ve sufficiently covered the first part of our opioid epidemic investment thesis (short the sellers), now let’s look at the second part of the thesis (long the sellers of drugs that combat addiction). Here are some examples of drugs that are being used to fight the opioid epidemic:

   ·         Naloxone (also known as Narcan) – Keeps addicts alive when they overdose so they continue overdosing in the future.

   ·         Methadone – Opioid used to help addicts taper off of their dependence on other opioids

   ·         Buprenorphine – Like methadone, this is also used for opioid replacement therapy

   ·         Naltrexone – Keeps addicts from getting high off opioids by blocking the effects of opioid drugs.

   The entire topic of opioids and the opioid epidemic falls outside the normal scope of emerging technologies that we cover here on Nanalyze, however it’s something that probably hits close to home for many of our readers. While none of us are mainlining smack in public restrooms, some of us have had a bit of experience on the black markets and understand the problems that addicts face more so than your average political commentator that writes for Tech Crunch. Depending on how interesting a topic our readers find this to be, we may do a follow up article on how to invest in the companies that produce the above mentioned drugs used to fight the opioid epidemic.

   It’s funny how we haven’t heard much from all the ESG investing types who drone on and on about how companies ought to behave, yet are failing to address an opioid epidemic that’s destroying America. Why don’t ESG providers issue a list of all the companies selling opioids and bring these front and center to the minds of impact investors? Where are all the protests and outrage for perhaps the biggest problem America faces right now?

   One firm that allows you to buy shares in startups before they IPO is Motif Investing. You can open a Motif Investing account for free with no deposit required  so you are ready to buy shares of future IPOs before they begin trading.

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2. Opioid firms must clean up their mess (OPINION)

   Aug 14, 2017 | Bucks County Courier Times

   By Mike DeWine

   Felicia Detty loved with all her heart. Growing up in southern Ohio in the rural village of Frankfort, she earned the nickname "Bug" because she gave the best hugs. Her dad was her best friend, and her daughter, Averie, was the love of her life

   At 18, when Felicia visited the emergency room for severe tooth pain, she hadn't planned on getting addicted to prescription pain pills or later heroin. As her mother, Christina, put it: "She had no intention of growing up saying, 'I want to be an addict. I want to suffer from substance-use disorder.' "

   In September 2015, Felicia died of a heroin overdose.

   Opioid addiction has become all too familiar in my home state of Ohio. The man-made public health-care disaster has spread to every county in the state. This is why, as state attorney general, I have filed suit against five of the largest manufacturers of brand-name and generic opioids.

   We believe evidence will show that they flooded the market with prescription opioids, such as OxyContin and Percocet, and grossly misleading information about the risks and benefits of these drugs. And as a result, we believe countless Ohioans and other Americans have become hooked on opioid pain medications, all too often leading to the use of cheaper alternatives such as heroin and synthetic opioids. Almost 80 percent of heroin users start with prescription opioids.

   Historically, opioid pain medications were considered too addictive and debilitating for anything but short-term acute pain and end-of-life care. But as we lay out in our legal complaint, starting in the late 1990s, manufacturers designed sophisticated marketing campaigns to target primary-care doctors - the doctors a typical Ohioan would visit - to convince them that opioids could and should be used for chronic pain.

   These companies changed the prescribing culture, convincing doctors that opioids were not very addictive, that addiction was easy to overcome and that addiction could actually be treated by taking more opioids. In 2014 alone, pharmaceutical companies spent $168 million to dispatch sales reps to win over these doctors with smooth pitches, slick slide decks and glossy brochures that downplayed the risks and highlighted the benefits of their branded drugs. As Endo Pharmaceuticals openly advertised, "People who take opioids as prescribed usually do not become addicted."

   They hired doctors to serve as "key opinion leaders" on advisory boards and to be part of speaker bureaus. They funded professional societies and patient advocacy groups, which then heralded the benefits of these drugs. In 2011, they spent $14 million on ads just in medical journals.

   And now, opioids are one of the most widely prescribed classes of drugs, raking in revenue of about $11 billion in 2014 and projected to grow to $17.7 billion by 2021. In 2012, Ohio patients received 793 million pills - enough to supply every man, woman and child in the state with 68 pills each. By 2016, roughly 20 percent of Ohio's population were prescribed opioids.

   We can no longer ignore the tragic consequences of addiction to these drugs. By 2015, opioids caused 82 percent of all overdose deaths in Ohio. But it's not just in my state. Each day, 3,600 Americans start misusing an opioid pain medication for the first time.

   The opioid epidemic is ripping apart families and tearing at the fabric of our communities. More than 4,000 Ohioans died last year from accidental drug overdoses - a 36 percent increase over 2015. Our jails have become detox centers. The foster care system is overflowing. More than half of Ohio children and 70 percent of infants placed in the foster system had parents who abused drugs. County coroners are struggling to keep up with the mounting bodies. And one morgue has resorted to borrowing a 20-foot mass-casualty cold-storage trailer to make room for the corpses.

   It is just and right that people who played a significant role in creating this mess should help clean it up. As Felicia Detty's mother pondered the role these pharmaceutical companies played in her daughter's death, she said: "They had the ability to just consume all of our communities. . . . But are they standing there when you kissed your child in a casket?"

   I applaud President Trump in acknowledging the opioid crisis as a national emergency. Additional resources from the federal government will help hard-hit states such as Ohio.

   In the mean time, it's time for these pharmaceutical Goliaths to take responsibility for their actions and stop trying to deceive Ohio and America. What they've done is morally and legally wrong.

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3. D.A. Crump announces major opioid-fighting initiative

   Aug 15, 2017 | News Channel 9 (ABC)

   By WTVC

   District Attorney Steven Crump of the 10th Judicial District has announced a major initiative to fight the opioid epidemic.

   Crump's release says more than a million Tennesseeans are in some stage of abuse or addiction to opioids, and that more Tennesseans will die from an opioid overdose than from homicides or car accidents in 2017.

   Crump's initiative has five components:Increase prosecution for dealersHold pharmaceutical companies who break the law accountableWork with community partners to raise awareness and educate childrenCreate a stakeholders advisory group that weighs in on official policyPush aggressively for better local treatment options

   Crump's release concludes with a call for local elected officials and the public, and closes with "together, we can win this fight."

   Full Press Release: https://www.scribd.com/document/356359143/Opioid-Press-Release#from_embed

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Broadcast Media Coverage

4. Fox 43 News in the Morning

   Aug 15, 2017 | WTNZ (Fox)

   By Knoxville, TN

   there are plans to hold a memorial for the to man in Virginia well in the last five days eleven people have died of suspected drug overdose in knox county that brings the total number of deaths this year or to hundred and ten the district attorney general estimates there were two hundred twenty four overdose deaths in all of last years up three from a previously reported number that number could continue to change to as autopsy reports are revised and finished we are on track to almost double last month just for months to month basis. Law enforced and plans is to hit the dealers at the folks that are prescribing wrongfully these hope you its and are communities general allen worries that the crisis could still get worse before it gets any better her office estimates we could hit three hundred overdose deaths before the end the year fellow east Tennessee district attorney general Steve Crump will now join the fight against opioid yesterday he announced plans to join a lawsuit with other area attorney general's that suit seeks civil damages from pharmaceutical companies believed to have broken laws tied t the opioid crisis.
   

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