Adding a New Stock Today

"Approximately 10.3 million people aged 12 or older misused opioids in 2018. 47,600 people a year die from opioid overdoses, that's 130 people a day"

​​The Portfolio

The portfolio is UP +14.33% YTD.

Our benchmark index, the S&P 500 is down -4.84% YTD.

Adding Heron Therapeutics

Today I'm adding a new position, buying 100 shares of Heron Therapeutics (HRTX) at $14.25. Analysts have price targets from $19 to $70. My 12-month price target is $40.

I also bought 3 shares of Northrup Grumman (NOC) at $306 to continue building our current position.

Heron Therapeutics, Inc., is a biotechnology company that engages in developing treatments to address unmet medical needs. The company's product candidates utilize its proprietary Biochronomer drug delivery technology, which delivers therapeutic levels of a range of short-acting pharmacological agents over a period from days to weeks with a single administration. The company offers SUSTOL (granisetron) extended-release injection for the prevention of acute and delayed nausea and vomiting associated with moderately emetogenic chemotherapy, or anthracycline and cyclophosphamide combination chemotherapy regimens; and CINVANTI, an intravenous formulation of aprepitant, a substance P/neurokinin-1 receptor antagonist for the prevention of acute and delayed nausea and vomiting associated with highly emetogenic cancer chemotherapy, as well as nausea and vomiting associated with moderately emetogenic cancer chemotherapy. For the rest of 2020 we can expect most of the companies revenues to come from CINVANTI.

Heron is also developing HTX-011, an investigational, dual-acting, and fixed-dose combination of the local anesthetic bupivacaine with a low dose of the nonsteroidal anti-inflammatory drug meloxicam that is in Phase III clinical trial for pain management; and HTX-034, a product candidate for postoperative pain management. Heron Therapeutics, Inc. was founded in 1983 and is headquartered in San Diego, California.

Yesterday HTX-011 received a highly unexpected Complete Response Letter (CRL) from the FDA. This CRL was a major setback for what is expected to be Heron's best selling drug. In a press release Heron stated that the FDA

'did not identify any clinical safety or efficacy issues or chemistry, manufacturing and controls issues. There are four non-clinical issues in the CRL, none of which relate to any observed toxicity.'

Given that HTX-011 has received both Fast Track status and Breakthrough Status from the FDA, one would think that the drug would be expedited. While COVID-19 dominates the news, I think we can all still remember that there is another epidemic in the U.S.; an opioid addiction epidemic, and HTX-011 is on piece in solving that crisis. HTX-011 for post-operative pain has been shown to significantly decrease opioid use, with 93% remaining opioid free 28 days after surgery.

Heron can request a Type A FDA meeting within 30 days to get clarification on what the FDA wants. Since there are no clinical or manufacturing issues Heron should be able to resubmit soon. The next review would take up to two months, so approval for HTX-011 could still happen by year-end.

"Markets don't go to zero, Portfolio's do.

Buy quality, be patient...and look twice for motorcycles."

- Clay Baker

Stay Invested,

Clay Baker

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Keep Me Honest 2020

  1. Today is a good time to carefully leg into stocks again (3-20-2020).

  2. Worst Case: S&P 500 decline further to around 2,100 - 2,150 (3-28-2020).

  3. Middle Case: S&P 500 level out around 2,650 - 2,700 (3-28-2020).

  4. Best Case: YE S&P 500 eventually rise to around 3,000 - 3,200 (3-28-2020).

  5. Market bottomed March 23, 2020 at S&P 500 2,237.40 (4-17-2020).

Clay's Rules

Rule #1: Don't lose money

Rule #2: See Rule #1

Rule #3: Portfolios go to zero, markets don't, Stay Invested

Rule #4: When a good stock you own drops 10% below your cost basis, add shares

Rule #5: Bull markets aren't sustained without the Transports

Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase

Rule #7: When an investment bank sells below book value, buy it

Rule #8: Tips are for waiters. Do your own homework.

Rule #9: Don't sell a stock because you're bored with it. Do your own homework.

Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:

ENPH, FOXF, WMT, AMZN

I am invested short in these securities mentioned in this post: GSX

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.
This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

© 2016 by Clay Baker all rights reserved