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Posted May 22, 2019

Byron King

By Byron King

Private Biotech Wins (By Not Going Public)

To the question of which is more top-of-mind: health care expenses or a volatile stock market...

I have had open heart surgery, says our reader, and I have severe progressive macular degeneration so health care takes top priority!

We get it; all the best to our reader.

As for the shelf life of Walmart and Amazon, our reader living in Texas says:

I shop them both and buy from whichever has the best price on the item I need.

However, when it comes to grocery shopping, I still want to squeeze the Charmin, pinch the peaches and sniff the melons. As long as I have a drivers license (and I still do at 82), I'll select my own groceries in person.

And as far as Alexa is concerned, I don't invite spies into my home.

As consumers, the old paradigms are shifting in front of us. Hard to notice in the day to day, but things are fundamentally changing all around us in innumerable ways.

In your opinion, whats been the biggest technology game changer of the past 20 years?

Your Rundown for Wednesday, May 22, 2019:

A Winning Private Biotech

U.S. drugmaker Merck & Co Inc on Tuesday agreed to buy Peloton Therapeutics Inc for $1.05 billion in cash, says Reuters, gaining access to the privately held companys lead kidney cancer drug candidate.

Peloton is in late-stage trials with a drug codenamed PT2977 thats shown promise for the treatment of renal cancer. Clinically speaking, almost a quarter of patients using the experimental drug have experienced a roughly 30% reduction of targeted kidney lesions.

Whats interesting about this company is that Peloton Therapeutics was considering going public like so many unicorn companies weve seen so far this year. Think Uber, Lyft, Pinterest, Zoom, Beyond Meat and the list goes on.

As a publicly-traded company, however, Peloton would have been valued at just under the billion-dollar mark. With the Merck deal now in place, Reuters reports, Peloton shareholders would be eligible to receive a further $1.15 billion on achieving certain sales and regulatory milestones.

The acquisition was the way to go. For both companies. The addition of a new cancer drug can only enhance Mercks investment-worthy status.

The deal should also underscore the opportunity for other small and mid cap biotech names in the cancer biology space, says Louise Chen of Cantor Fitzgerald.

Market Rundown for Wed. May 22, 2019

S&P 500 futures are down 7 points to 2,857.66.

Oils down 75 cents to $62.38 for a barrel of WTI.

I whiffed the price of gold big time yesterday -- apologies. Golds added $2.10 to its price of $1,275.30 per ounce.

Bitcoin is down $108.59 to $7,840.18.

Have a great day. Well catch up tomorrow.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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