Mechelany Advisors’ MODEL PORTFOLIO has been running in a fully transparent way since January 1st 2014. Its Purpose is to implement the conclusions of our research analytical process in a portfolio managed using institutional liquidity, diversification, risk management and asset allocation processes. In our TRANSACTION UPDATES we keep our reader informed in real time of the transactions in our MODEL PORTFOLIO
Today, our short March 2021 Future contract that expired on March 26th settled and we did not renew our position. We took our loss and decided to wait before re-establishing our short position
Increasing IQIYI. IQ US
We took advantage in the carnage of the ARCHEGOS Fund to BUY more IQIYI, the Chinese online gaming platform, GREAT BUYING OPPORTUNITY our average cost is now is 20.85.
Increasing EPIYZME. EPZM US
We took advantage of the weakness in biotech stocks to increase our position in EPIZYME after the CEO himself bought US$ 500’000 worth of shares at these levels,
Adding Intercept Pharmaceuticals. ICPT US
We added a new position in Intercept Pharmaceutical ICPT , where, there again, Insider activity is buying.
Intercept, a specialist in the treatment of chronic liver conditions. Intercept Pharma is working to develop treatment for several chronic and serious diseases of the liver, including primary biliary cholangitis (PBC) and nonalcoholic steatohepatitis (NASH). The company’s chief compound, obeticholic acid (OCA), was developed as an analog of the CDCA bile acid, and can play a role in treating liver conditions through the FXR receptor pathway. OCA, also called Ocaliva, has received approval by the US FDA and in Europe for use to treat PBC.
Intercept has, in recent months, seen important changes. First, the company has experienced churn in the upper management. Effective this past January 1, the company’s COO Jerome Durso stepped up to the CEO post, and earlier this month CFO Sandip Kapadia announced that he will step down on March 26. His position will be filled on an acting basis by Rocco Venezia as an interim measure.
On the business side, the company reported 4Q20 results at the end of February.
The release showed significant gains in worldwide sales of OCA. Q4 net sales reached $83.3 million, up 18% year-over-year, and the full year sales grew 25% yoy to reach $312.7 million. The company gave guidance toward $325 million to $355 million for 2021 net sales of OCA.
On a negative note, the EPS net loss in Q4 was worse than expected, coming in at $1.58 against a forecast loss of $1.47. And, while the OCA sales were up from last year, quarterly revenue was also below expectations.
After the earnings release, the stock fell 19%. That loss came on top of a difficult 9 months for Intercept. The stock is down ~74% over that period. The run of losses started last June, when the FDA rejected an application for approval of OCA to treat NASH-related liver fibrosis.
OCA is currently undergoing an extensive Phase 3 trial for this condition, to back new applications for approval by the end of this year. There are no current medications for the treatment of NASH and its complications, and Intercept anticipates the market could reach $5 billion in annual sales.
Our Technical Analyst Christian Leydet says the following :
Historical support @ USD 18.00 (2012, 2021)
Short term double top completed and rebound on 2012 bottom (USD 18.00) which means strong support at that level. Upside reaction combined with strong volume and potential break of the downtrend
First target @ USD 26.00 (Short term downtrend and double top neckline and MA50)
If USD 26.00 challenged, expected retracement @ USD 24.00 before targeting USD 39.00
We increased or Short position in TESLA at $ 631 and re-instated our short position in the RUSSELL 2000 ETF IWM US on the development of a significant SELL signal at the MACDs
New Asset Allocation
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