The bounce back for healthcare stocks started back in May, but has faced some selling pressure in more recent trading sessions as market volatility grew. . However, over the last few days, prices of the iShares Nasdaq Biotech ETF (IBB) as well as the SPDR Healthcare ETF (XLV) have recovered from previous lows this week, and are now trending higher. Today’s premarket trading, may suggest that the bulls could be back in trading at least for the short term.
As far as healthcare stocks are concerned, 2018 and most likely 2019 could be ready to see a jump in deals. According to a report from McKinsey & Company, the number of healthcare services deals among institutional investors nearly doubled from 2012 to 2017. McKinsey & Co. counted 225 deals in 2012 and 510 in 2017, reflecting a compound annual growth rate of 18%. In addition, the report found that healthcare spending is projected to increase 6 percent a year through 2025.
Following these latest industry trends, here are three companies looking to take advantage of the boom in healthcare.
Premier Health Group, Inc. (PHGRF)(PHGI.CN) saw its shares trade higher Thursday on increased volume. This may be due, in part to the company’s most recent announcement that Premier Health Group, Inc. (PHGRF)(PHGI.CN) common shares have begun to trade on the OTC Markets Group Inc.’s OTCQB Venture Market in the United States, under the symbol PHGRF, and are now Depository Trust Company eligible, effective Oct. 22, 2018.
Premier Health Group, Inc. (PHGRF)(PHGI.CN) successfully acquired HealthVue Medical Clinics this past August. With this acquisition, Premier was able to enter the primary care clinic and health care technology business. HealthVue is a group of four Greater Vancouver-based fully integrated, paperless and electronic-medical-record-based medical clinics with a 10-year history, 22 health care professionals and over 100,000 active patients. The clinics have seen revenue growth in excess of 25 percent year over year for the past three years and thus far accounted for over 36,000 patient visits in 2018. HealthVue will open its fifth clinic in Q4 2018.
In the U.S. market, alone, the Telehealth industry is on fire right now, predicted to reach a $2.8 billion valuation by 2025, with the heat only intensifying with time. According to Reuters, the deployment of telemedicine has significantly altered the healthcare paradigm, due to the many technological advancements in the field of medical devices and services.
Sellas Life Sciences Group (SLS) saw its shares gap up during premarket hours on Thursday morning. Sellas is a clinical-stage biopharmaceutical company focused on the development of novel cancer immunotherapies for a broad range of cancer indications. The company most recently reported data from the prospective, randomized, single-blinded, controlled Phase 2b independent investigator-sponsored clinical trial of the combination of nelipepimut-S (NeuVax™, NPS) +/- trastuzumab (Herceptin®) targeting HER2 low-expressing breast cancer patient cohorts. The data were presented in an oral presentation at the European Society for Medical Oncology (ESMO) 2018 Annual Meeting, being held in Munich, Germany.
In the October 22 release, Dr. Angelos Stergiou, MD, ScD h.c., President and Chief Executive Officer of SELLAS said, “The combination of NPS and trastuzumab demonstrated a clinically meaningful and statistically significant difference in the cohort of patients with TNBC with a 75.2% reduction in risk of relapse or death at 26 months. Importantly, following review of the final data that were also assessed by the independent Data Safety Monitoring Board (DSMB) on October 15, 2018, there was an incremental further improvement of clinical benefit to patients now observed in comparison with the data from the interim analysis completed more than six months ago.”
Cigna Corp (CI) saw gains of nearly 4% in its share price in early trading Thursday. The company has been expanding its reach into healthcare technology. Telehealthcare has continued to grow as noted with Premier Health mentioned above. Cigna is also throwing its hat into the ring. William Lopez, M.D., CPE, Senior Medical Director, Behavioral Health of Cigna Behavioral Health, in his keynote Key Issues Shaping The Market For Complex Consumers: The Health Plan Perspective On What Executives Need To Know To Succeed, discussed the Cigna plans use telemedicine for behavioral coordination of care and psychiatric consultation.
Cigna said on Thursday its $52-billion acquisition of pharmacy benefits manager Express Scripts Holding Co (ESRX.O) was on track to close by the end of the year. Chief Executive Officer David Cordani said on a conference call that the deal has won 23 state approvals, with six other approvals pending. The Department of Justice cleared the deal in September.
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