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I'm very nicely.
The second half of 2013.
Is officially started we call a two way -- second half of the markets ended the day to the upside good start to July so what are we likely to see in the second half of the year.
It's a -- broad statement.
But we decided to break it down all this week we're going to be talking the industry experts.
About what to expect in each market sector during our second half set up series and today we're joined by Jeff Jonas -- the belly fund's portfolio manager.
And what he just predicting today we picked up pharma sector -- -- how first of all rearview mirror -- -- first half.
Well it's been a great year to be -- health care investor best and 19% year to date it's been one of the strongest performing indexes.
Of the market.
And I think it's been two things it's been night continued preference for defensive dividend paying stocks and certainly big pharma fits -- -- And it's also been some growing comfort with Health Care Reform I mean this whole sector got crushed four years ago and we went through that whole debate and pass the law.
But since then they've adapted really well in terms of dealing with some of the taxes the regulation and and they've been able to continue to raise price and pass -- through the consumer well.
Know that it's going to kick in Obama -- will kick in and 2014 but it has not as you mentioned seemed to hurt.
-- in general but if you break it apart pharma goes into many different areas and other bio sciences -- farm regular pharma.
The little guys the big guys but.
What do you like to focus on particularly when it comes to trends in the second half.
Well certainly one of the hot areas right now -- cancer and we saw that today with Amgen's bid for our Onyx Pharmaceuticals.
And I think to the stocks they can really look for -- America and Bristol-Myers they've.
They're going to be leaders now they have a new drug -- PD one inhibit our.
It gets your body's own immune system to fight off the skin cancer of the lung cancer really a wide range of uses.
Very few side effects is probably expect so these are this is a drug that can attack different cancer season.
And it's just going into the final phase face three of clinical trials it's probably about three years away from the market.
But this is potentially a fighter even -- ten billion dollar drug when it comes to market okay that's huge considering that they consider of one billion dollar drug up blockbuster.
Well given the range of uses that a potentially has it I think and the price that it would.
-- command it should certainly be in the tens of thousands of dollars.
You know it's going to be a very big market so Merck Bristol-Myers.
What your picks interestingly enough is a hospital company and not a pharma company has Tenet Healthcare you're looking -- Well that's one of the other winners from Health Care Reform.
You know hospitals today it was 5020%.
Of revenue to bad debt at a charity care.
So anything that cuts down on that like covering the uninsured will be a real big benefit for them.
They officers should see some extra procedure volume from covering the uninsured but mostly it's just reducing that bad debt.
And they just announced a great acquisition recently a vanguard health it looks like that deal could -- a dollar a share in earnings once it's fully integrated.
Another pick and this is a pharmaceutical with the new diabetes stroke diabetes of course is one of the top.
Five if not top three problems that affects as many Americans -- this -- lexicon.
Why do you believe they'll be a winner in the second half.
Well this is a relatively small cap name that has what's called and asked yelled to -- there it gets your kidneys to help treat the diabetes.
And they don't have a partner yet for this drug but there's shopping it around now they're talking to all the big pharmaceutical companies and they could have something signed by the end of the year.
That would get him a big upfront payment would help them with the cost of the phase three clinical trial.
And then they would get royalties and help marketing -- once it's finally approved so I think there's a catalyst here.
That could come by the end of the year are so we've got those names and then you also see on on his list BA access Baxter International where's the opportunity there -- -- -- Yeah I mean about half the businesses blood plasma which is just a study growing kind of mid single digit type of business they're getting big in the Brazil and some of the other emerging markets.
And then the other half -- medical devices and they're getting bigger and kidney dialysis and another type of diabetes play.
Through the acquisition of damn -- and again that's to be in -- creative deal.
About what I really like what I think -- kind of a hidden call option here is that they're testing they're gamma guard blood plasma for alzheimer's disease.
I think they found a few patients that respond well do it they're gonna keep going forward with the clinical trial for that but that's succeeds that again has a multibillion dollar market.
-- your parents say why didn't you just become a doctor can.
Good to see we're gonna put all of -- that picks up on the FaceBook dot com slash after the bell Paige Jeff -- of the belly.
Great to hear your enthusiasm about the second half for pharma great thank you so much David.
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