Swiss drug maker and Income Portfolio member Novartis (NVS) is on the verge of shaking up the market for multiple sclerosis drugs. The neurological disease, also known as MS, affects some 2.5 million people worldwide. It has a growing drug market, expected to reach $15 billion by 2015.

Late last week, an FDA advisory panel voted 21-3 in favor of Novartis’s Gilenia drug to be “generally recommended” as an initial treatment for MS. Gilenia would be the first pill used to treat the disease, whose current therapies are harder to maintain because of difficult administration and/or harsh side effects.

While the panel voted unanimously in favor of the pill’s efficacy and safety, it does not come without its own side effects, including heart, lung, and liver risks and infections. With these in mind, the panel voted to suggest a study of lower dosing amounts: 0.25 milligrams a day, versus the current 0.5 milligram proposed daily dose. The study, which Novartis says could take some five to six years to complete with 2,000 patients, can wait until Gilenia is on the market, according to the panel.

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The focus of healthcare reform continues to be on improving care and coverage while lowering overall costs to Americans. However, some may overlook that there are other measures beyond expanded insurance coverage and technology adoption that will be used to accomplish this. One such measure included in the healthcare overhaul signed into law earlier this year permitted U.S. regulators to approve generic forms of biological drugs.

Biological drugs, or biologics, are those drugs made from a living organism (or its products) used to prevent or treat cancer, arthritis, and other diseases. It’s a big and promising market, so it’s not surprising that Growth Portfolio member Teva Pharmaceutical (TEVA) is working to enter it in the U.S.

The Israeli-based, worldwide generic drug leader is currently recruiting patients for clinical trials of a “biosimilar” that treats rheumatoid arthritis. The name brand drug, Rituxan, is also used to treat non-Hodgkin’s lymphoma and is the second biggest selling drug of Roche Holding AG (former Growth Portfolio member). Teva already sells the generic version, dubbed MabThera, outside the US, but is working for regulatory approval here by 2014.Read more...

With healthcare reform through Congress and signed by the President, there are sure to be changes in the sector’s landscape. We explore some of what we see as the surest winners in your May issue of The Complete Investor. Today we’ll cover some recent earnings reports from healthcare positions in our Growth Portfolio. Our picks are benefiting from an already well-entrenched trend: the proliferation of generic drugs.Read more...

The other day, a close friend of mine sent me a few paragraphs regarding a new relationship China has formed with the World Gold Council. The WGC is a trade association for gold miners, and China is working with it to develop new gold-related investment products.

One paragraph stood out like a sore thumb: “The arrangement with ICBC, China's largest bank by assets, is designed to promote continued strong demand for gold in China at a time when the country's recent rapid growth in gold production seems likely to slow, creating more need for imports.”

You may recall from a recent update that China has been mining a very high portion of its gold reserves – 16% in the past year according to the USGS. That's more than 3X the global rate of reserve extraction! In fact, the nation has become the largest gold producer in the world despite a reserve base which is nothing to write home about. Australia, for example, with three times the reserve base of China, is producing only 2/3rds as much gold as China.

Certainly, this desperate mining rate puts the lie to recent claims that Chinese demand for gold is ready to slow and that the country doesn't want to make gold a bigger part of its monetary reserves. In fact, it looks like China wants to acquire as much gold as it can as quickly as it can without triggering a squeeze in the gold market.Read more...