Core Insights - Allka Research has over two decades of experience in investment, focusing on uncovering undervalued assets in ETFs, commodities, technology, and pharmaceutical sectors [1] - The company emphasizes a conservative investment approach, aiming to deliver substantial returns and strategic insights to clients [1] - Allka Research is committed to simplifying investment strategies, making them accessible to both seasoned and novice investors [1] Company Mission - The mission of Allka Research is to empower individuals financially by sharing knowledge and insights through the Seeking Alpha platform [1] - The company aims to provide thought-provoking analyses and informed perspectives to foster a community of informed investors [1] - Allka Research seeks to demystify investing, inspiring confidence in readers to navigate the financial markets intelligently [1]

Group 1 - Brendan completed a Ph.D. in organic synthesis at Stanford University in 2009 and has a background in the pharmaceutical industry, having worked for Merck from 2009 to 2013 [1] - Brendan has experience in biotech startups, including Theravance and Aspira, and is a co-founder of 1200 Pharma, which received significant investment in the eight figures [1] - Brendan remains an avid investor with a focus on market trends, particularly in biotechnology stocks [1]

Market Performance - The S&P 500 index increased by 2.4% this week, while the Nasdaq rose by 3.9%[1] - Large-cap growth stocks (Russell 1000 Growth) outperformed with a gain of 3.2%, compared to small-cap value (Russell 2000 Value) at +2.5%[1] - The technology hardware and equipment sector led the gains with an increase of 3.9%[1] Fund Flows - Estimated fund flow for S&P 500 components was +$65.6 billion this week, down from +$91.7 billion last week[2] - Semiconductor products and equipment saw the highest inflow at +$22.9 billion, while media and entertainment experienced the largest outflow at -$13.2 billion[2] Earnings Forecast - The forward 12-month EPS estimate for S&P 500 components was revised up by 0.4% this week, consistent with the previous week[3] - The automotive sector saw a significant upward revision of 9.0% in earnings expectations, while durable goods and apparel experienced a downward revision of -0.5%[3] Risk Factors - Key risks include uncertainties in economic fundamentals, international political situations, U.S. fiscal policies, and Federal Reserve monetary policies[3]

Core Viewpoint - Beijing has announced the planning scheme for the International Biomedical Innovation Park (BioPark), aiming to establish a global hub for pharmaceutical health innovation through high-standard industrial functional zones [1][2] Group 1: Industrial Functional Zones - The BioPark will feature four main industrial functional zones: Headquarters Gathering Area, Medical-Engineering Integration Area, R&D Transformation Area, and Pharmaceutical Intelligent Manufacturing Area [1] - The Headquarters Gathering Area will focus on becoming an international pharmaceutical industry exchange hub, attracting top global biopharmaceutical companies and innovation centers [1] - The Medical-Engineering Integration Area aims to introduce national-level research institutions and clinical research centers to support cross-innovation in medical and engineering fields [1] - The R&D Transformation Area will consolidate common technology service platforms, creating an integrated space from research and development to large-scale production [1] - The Pharmaceutical Intelligent Manufacturing Area will concentrate on smart manufacturing "lighthouse factories" to promote the industrialization of significant global innovations [1] Group 2: Infrastructure and Collaborations - The park will host a national artificial intelligence application pilot base and develop critical infrastructure such as a supercomputing base and a trusted data space for the healthcare and pharmaceutical industries [1] - Collaborations with renowned universities will lead to the establishment of a life and health industry integration base and the Beijing Life and Health Industry Innovation Research Institute [1] - An international clinical medicine research center will be built, focusing on medical research and innovation transformation [1] Group 3: Current Attractiveness - The BioPark is strategically located along Beijing's southern central axis and has already attracted multinational companies such as Eli Lilly, Pfizer, Bayer, and Medtronic, covering areas like innovative drugs and high-end medical devices [2]

Core Insights - Eli Lilly (LLY) is a market leader in the GLP-1 segment with its tirzepatide medicines Mounjaro and Zepbound, while also generating significant revenue from its oncology franchise, which accounted for over 15% of its first-half 2025 revenues, growing approximately 10% year over year [1] Oncology Sales Performance - The oncology unit's sales for Q3 2025 are estimated at $2.58 billion, reflecting over 15% year-over-year growth, primarily driven by the blockbuster breast cancer drug Verzenio, which saw increased demand and higher prices, despite currency headwinds and competitive pressures [2][9] - Sales from RET inhibitor Retevmo and lymphoma drug Jaypirca are expected to positively contribute to growth, although this may be partially offset by declining sales of older drugs like Alimta and Cyramza due to competition from immuno-oncology agents [3] New Drug Launch - Eli Lilly received FDA approval for its new breast cancer drug Inluriyo in late September, but the launch is expected to occur in the coming weeks, meaning no sales contribution from this drug in Q3 [4] Market Dynamics - Attention is shifting towards Lilly's oncology unit, which is demonstrating consistent double-digit growth, potentially reassuring investors that the company's earnings are not solely reliant on the obesity segment ahead of Q3 results on October 30 [5] Competitive Landscape - Major competitors in the oncology space include AstraZeneca, Merck, and Pfizer, with AstraZeneca's oncology sales accounting for nearly 43% of total revenues and growing 11% in the first half of 2025, driven by drugs like Tagrisso and Lynparza [6] - Merck's Keytruda accounted for over 48% of its total revenues in the first half of 2025, while Pfizer's oncology revenues grew 9% operationally, driven by drugs like Xtandi and Lorbrena [7] Valuation and Estimates - Eli Lilly's shares are currently trading at a price/earnings (P/E) ratio of 27.99, which is higher than the industry average of 15.56 but below its five-year mean of 34.54 [10] - EPS estimates for 2025 have decreased from $23.15 to $22.86, and for 2026 from $30.82 to $30.78 over the past 30 days [12]

Core Viewpoint - Eli Lilly announced its acquisition of Adverum Biotechnologies, a gene therapy developer, in a deal valued at up to $261.7 million, aimed at enhancing its pipeline for experimental treatments for eye diseases [1] Company Summary - The acquisition is part of Eli Lilly's strategy to strengthen its product offerings in the gene therapy space, particularly focusing on eye diseases [1] - The deal reflects Eli Lilly's commitment to expanding its research and development capabilities in innovative therapies [1] Industry Summary - The gene therapy market is experiencing significant growth, with increasing interest from major pharmaceutical companies looking to invest in innovative treatment options [1] - This acquisition highlights the competitive landscape in the biotechnology sector, where companies are actively seeking to enhance their portfolios through strategic mergers and acquisitions [1]

Group 1 - Eli Lilly's stock (NYSE: LLY) has increased by 10% this month due to strong clinical trial progress, particularly positive Phase 3 results for its oral GLP-1 drug, orforglipron, aimed at diabetes management and weight loss [2] - Investor confidence is further enhanced by speculation regarding the potential for expedited FDA approval for orforglipron [2] - Eli Lilly is noted for its monopoly-like high margins at a discounted price, which contributes to consistent and predictable profits and cash flows, thereby mitigating risk and enabling capital reinvestment [3] Group 2 - Eli Lilly offers innovative pharmaceuticals globally, including treatments for cancer, rheumatoid arthritis, and autoimmune conditions [4] - The company’s pricing power and high margins are significant factors that attract market rewards, indicating a strong competitive position [3][4] Group 3 - The stock selection strategy employed targets companies with a market cap greater than $10 billion, focusing on those with high cash flow from operations margins and those that have seen significant valuation drops over the past year [6] - Historical data shows an average 12-month forward return of around 19% and a win rate of approximately 72% for selected stocks [6][7]

Core Viewpoint - Evolution AB (publ) reported disappointing Q3 2025 results, leading to an 8% drop in stock price, indicating negative market sentiment towards the company's performance [1]. Financial Performance - The Q3 2025 report revealed a decline in net sales, contributing to the overall disappointment among investors [1]. Market Reaction - Following the earnings report, the stock experienced a significant decline of 8%, reflecting investor dissatisfaction with the quarterly results [1].

Company Strategy - Lilly reached a deal to buy Adverum Biotechnologies [1] - Lilly continues a push into gene therapies [1] Industry Focus - Adverum Biotechnologies is working to treat blindness [1]

Core Viewpoint - Eli Lilly (LLY.US) announced plans to acquire gene therapy company Adverum Biotechnologies (ADVM.US) and its lead gene therapy candidate Ixo-vec, with the acquisition expected to enhance its capabilities in gene therapy for age-related diseases [1] Group 1: Acquisition Details - Eli Lilly will initiate a tender offer to acquire all outstanding shares of Adverum at a price of $3.56 per share [1] - The agreement includes a contingent value right (CVR) that could provide an additional $8.91 per share if specific milestones are met, bringing the total potential value to $12.47 per share [1] - The acquisition is expected to be completed in the fourth quarter of 2025, subject to customary closing conditions [1] Group 2: Strategic Rationale - Adverum focuses on developing intravitreal single-dose gene therapies aimed at restoring vision and preventing blindness [1] - The core product candidate, Ixo-vec, is a gene therapy for treating wet age-related macular degeneration (wAMD) [1] - The acquisition is intended to combine Eli Lilly's gene drug development capabilities with Adverum's technical expertise in ophthalmic gene therapies, expanding the potential of gene therapy in alleviating age-related disease burdens [1]