US equities finished a week of clashing tariff headlines on a high note, as investors tried to anticipate the next moves in the trade war with China. Ten-year Treasury yields gained, while the dollar rose and West Texas crude held above $57 a barrel. The S&P 500 Index jumped to a new closing high Friday, surpassing a record set the previous session and registering its fifth consecutive weekly gain, sparked by optimism that global growth troubles are dissipating.

Healthcare and tech stocks led advancers, while energy and utilities slid. The Dow Jones Industrial Average ended the session little changed, while the Nasdaq Composite also reached a record. Investors were whipsawed toward the end of the week amid an onslaught of contradictory headlines about progress toward an interim deal in the US-China trade war.

Some investors clearly see healthcare as a “hedge” against the unpredictability of a stock market, roiling in trade uncertainty. Our weekly health-sector stock chart–located below–shows that 31 out of 47 stocks moved higher last week. The math says that’s 66% of the overall group—-almost two out of three. Next up are the week’s top advancers and decliners where the moves are tied to company-specific news:

1) NextCure Inc. (Nasdaq:NXTC) led advancing issues, nearly tripling over the week to $82.89. The clinical-stage biopharmaceutical company developing new cancer drugs, updated clinical trial results from a handful of non-small cell lung cancer patients. Beltsville, MD-based NextCure made its stock-market debut in May. At the moment, a Siglec-15 (S15) antibody called NC318 is its only new drug candidate in clinical-stage testing. In March the company said that NC318 shrank tumors for one lung-cancer patient treated in a proof-of-concept study. The stock took off like a rocket when investors learned that one patient achieved complete remission, another experienced tumor shrinkage, and three more haven’t gotten any worse.

The experimental cancer drug’s target, S15, shuts down immune-system attacks against foreign cells before neighboring healthy cells get caught in the fray. This pathway is often exploited by cancer cells, which allows tumors to grow unchecked. If this sounds familiar, it’s because blockbuster cancer therapies like Keytruda work similarly, by aiming at a different target called PD-L1.

2) Elsewhere, Constellation Pharmaceuticals Inc. (Nasdaq:CNST) rocketed 119% over the week to $30.91 after the company provided its third-quarter update. Constellation announced the publication of new data from its Manifest Phase 2 clinical study evaluating experimental drug CPI-0610 in treating myelofibrosis. The company said that these new data showed “signs of encouraging clinical activity in both JAK-inhibitor-naive patients and ruxolitinib-refractory or -intolerant patients.”

Cambridge, MA-based Constellation’s latest data are so promising that the company is even expanding the Manifest clinical study to examine the effects of CPI-0610 on first-line patients and second-line transfusion-dependent patients more closely. Constellation stated that all four patients in the third arm of the study who received CPI-0610 in combination with Jakafi in a first-line setting experienced spleen volume reduction of at least 35% and a reduction in total symptom score of at least 50%.

Results from patients in the other two arms of the study were presented at major conferences in June 2019. The biotech expanded the third arm of the study to around 100 patients, up from the 43 initial patients.

3) And Fulgent Genetics Inc. (Nasdaq:FLGT) soared 68% to $15.82 after reporting that its third quarter revenues rose 84% year over year driven by a strong increase in billable tests. For the three-month period ended Sept. 30, the Temple City, CA-based company posted revenue of $10.3 million compared with $5.6 million a year ago. The number of billable tests delivered in the quarter grew 272% to 20,697, Fulgent said.

“Revenue and billable test volume reached new record highs in the third quarter, while cost per test continued to improve. Our strong top line results have been driven by the growing traction with our oncology and reproductive health businesses, as well as our sequencing-as-service offering,” Chairman and CEO Ming Hsieh added.

Fulgent CFO Paul Kim noted that the US continues to be the primary growth driver for the firm, with US revenues growing 159% year-over-year and comprising 82% of total revenue in Q3.

Fulgent posted a net income of $1.5 million, or $.08 per share, up from a loss of $595,000, or $.03 per share, in Q3 2018. On an adjusted basis, the company reported net income of $.14 per share.

4) But thinly traded AnaptysBio Inc. (Nasdaq:ANAB) plunged 74% to $10.18 in response to its announcement that lead candidate etokimab failed to achieve the primary endpoint in a Phase 2b clinical trial, dubbed ATLAS, in patients with moderate-to-severe atopic dermatitis. Specifically, etokimab, an IL-33 inhibitor, failed to sufficiently separate from placebo as measured by the percentage change in a scale called EASI at week 16. Additional data will be released next quarter. In light of the disappointing outcome, the San Diego-based company has decided to postpone the launch of its Phase 2b study evaluating etokimab in eosinophilic asthma.

The ongoing Phase 2 ECLIPSE trial in patients with chronic rhinosinusitis with nasal polyps will continue. Topline results should also be available next quarter.

5) And Swiss-based drugmaker ObsEva SA (Nasdaq:OBSV) skidded 62% to $3.00 after saying it’s abandoning the current program for its prospect nolasiban after the drug–aimed at boosting pregnancy following in-vitro fertilization (IVF)–failed a late-stage European study. Nolasiban did not meet the primary endpoint of an increase in ongoing pregnancy at 10 weeks, with 39% of women on the placebo experiencing an ongoing pregnancy, compared with 41% of women who got nolasiban, the company said in a statement. This proposed use of nolasiban, an oral oxytocin receptor antagonist licensed from Merck KGaA to help women getting IVF therapy, had been a central part of ObsEva’s plans. The trial failure leaves the company with drug candidates for endometriosis and potentially dangerous pre-term labor.

“We are extremely disappointed with these unexpected results, not in the least for the millions of women hoping to have a baby through IVF,” said Ernest Loumaye, a gynecologist and former Serono drug developer who founded ObsEva. “We have decided to discontinue the current nolasiban IVF program and will explore potential repositioning of the product candidate.”

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Weekly Stock Performance (as of November 8, 2019). P/E multiples based on predicted next annual earnings period. NM = Not meaningful

GROUP                 CLOSE     CHG     %CHG     P/E

Providers/HMOs

Amedisys             149.25    +2.75    +1.88    31.2

Community Hlth         2.82    -0.38   -11.88    NM

Encompass HC          70.41    +1.37    +1.98    19.2

Fresenius             37.61    +1.00    +2.73    14.3

HCA                  136.84    +3.19    +2.39    11.8

HCP                   35.78    -0.93    -2.53    77.8

Tenet Health          29.70    +3.82   +14.76     9.1

Universal Hlth       141.13    +2.38    +1.72    12.9

Anthem               282.09   +11.34    +4.19    12.4

Cigna                188.20    +8.69    +4.84    10.1

Humana               317.58   +21.38    +7.22    17.0

UnitedHealth         256.97    +4.76    +1.89    15.3

Pharma/PBMs                  

AstraZeneca           47.26    -1.13    -2.34    23.4

BristolMyers          58.02    +0.86    -1.51     9.4

GlaxoSmithKline       44.42    -0.85    -1.88    14.6

Johnson&Johnson      133.00    +1.80    +1.37    14.7

Eli Lilly            113.53    +1.02    +0.91    17.3

Merck                 83.59    -1.35    -1.59    14.8

Mylan                 17.61    -2.07   -10.52     3.9

Novartis              88.37    +0.74    +0.84    15.3

Pfizer                37.05    -1.34    -3.49    12.8

Sanofi                45.86    +0.22    +0.48    12.9

CVS Health            72.47    +5.23    +7.78    10.1

Walgreens             59.24    +1.86    +3.24     9.3

Medical Supplies                   

Abbott Labs           83.74    +1.08    +1.31    23.3

AbbVie                85.21    +3.46    +4.23     9.0

Amerisource           86.07    -0.80    -0.92    10.6

Baxter                78.51    +0.60    +0.77    20.9

Becton Dickinsn      244.79   -13.36    -5.18    17.5

Cardinal              53.75    +3.31    +6.56    10.2

McKesson             140.20    +3.09    +2.25     9.1

Biotech                 

Amgen                221.11    +3.16    +1.45    13.9

Biogen               293.25    -5.95    -1.99     8.9

Biomarin              75.90    +2.27    +3.08    NM

Celgene              109.54    +1.01    +0.93     8.8

Emergent Bio          54.04    -5.02    -8.50    15.2

Gilead                65.38    +0.72    +1.11     9.4

Incyte                85.10    +1.52    +1.82    27.7

Regeneron            341.79   +31.31   +10.08    13.2

Vertex               201.31    +0.37    +0.18    30.5

Medical Devices                   

Boston Sci            40.51    -1.00    -2.41    22.6

Intuitve Srg         548.95   -10.42    -1.86    39.0

Medtronic            107.30    -1.54    -1.42    17.8

Stryker              199.78   -12.99    -6.11    22.1

Thermo Fisher        294.65    -8.95    -2.95    22.3

Varian               124.76    +1.46    +1.18    20.1

Zimmer               144.00    +5.78    +4.18    16.7

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Talk to you soon,

Steve Walker

Founder and Editor

MondayMorning