Road to Recovery: Stock Hotlist for The Week of June 1st, 2020

After staging quite a recovery, markets are facing even more headwinds.

For weeks, markets rocketed higher on global plans to reopen economies.  But chaos with China could derail the optimism – and fast.  

All on concerns of how the U.S. will respond to the latest news from China.

China just approved a proposal to impose a new national security law for Hong Kong.  This could be met with a strong response from the U.S.   

While details of the potential law are scarce, it will reportedly target secession, subversion of state power, terrorism, and foreign interference.  On passage, it won’t sit well with most of the world, especially the U.S.  President Trump says the U.S. will have “a very strong reaction” to new China legislation. 

“We think it would be a significant shock to markets were Trump to announce anything that risked the phase one trade deal,” said Jasper Lawler, head of research at London Capital Group, as quoted by MarketWatch.  “Revoking Hong Kong’s Special Status with the U.S. seems unlikely, It wouldn’t help the people of Hong Kong and would be a self-inflicted wound because it would just limit U.S. company access to China.”

As we wait to see what happens next, here are some of the top opportunities to watch.

Opportunity No. 1 – Fate Therapeutics (FATE)

The FDA just cleared Fate’s investigational new drug application for FT538. “Clinical data suggest that deficiencies in NK [natural killer] cell-mediated immunity, which are evident even at the earliest stages of myeloma, continue to accumulate through disease progression. We believe administration of FT538 to patients can restore innate immunity, and that the anti-cancer effect of certain standard of care treatments, such as monoclonal antibodies, can be more effective when combined with the engineered functionality of FT538,” said President and CEO Scott Wolchko.

Opportunity No. 2 – TG Therapeutics (TGTX)

Michael S. Weiss, the Company’s Executive Chairman and CEO says, “The first few months of 2020 have undoubtedly been the most impactful and exciting in our Company’s history. We kicked off the year with the initiation of our first rolling regulatory submission for umbralisib in both MZL and FL and most recently reported positive topline results from our UNITY-CLL Phase 3 trial evaluating our proprietary U2 combination in patients with CLL. This positive outcome marks a major step forward in our mission of developing the best possible combination treatment options for patients with B-cell diseases.”

“We now have three successful pivotal data sets which we believe have the potential to support regulatory approvals across MZL, FL and CLL. With more than $150 million proforma in cash on our balance sheet, we are well funded through and beyond our next set of key milestones, including the release of topline data from the ULTIMATE MS Phase 3 program, submission of an NDA/BLA for U2 in CLL, and hopefully, our first approval for umbralisib in MZL and FL, all of which are targeted to occur over approximately the next 9 months.”

Opportunity No. 3 – Novavax Inc. (NVAX)

Novavax just started its first human study of its COVID-19 vaccine. Initial results on safety and immune responses due in July 2019. “Administering our vaccine in the first participants of this clinical trial is a significant achievement, bringing us one step closer toward addressing the fundamental need for a vaccine in the fight against the global COVID 19 pandemic,” said Stanley C. Erck, President and CEO of Novavax. “We look forward to sharing the clinical results in July and, if promising, quickly initiating the Phase 2 portion of the trial.”