Sustainable Future

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A Tax Credit Extension to Brighten Up Solar Future?


  • A few days ago, a bipartisan group of representatives and senators introduced the “Renewable Energy Extension Act” in both the US House of Representative and the Senate. This new legislation intends to provide a 5-year extension to the Solar Investment Tax Credit (ITC), a tax incentive offering 30% discount on the price of solar systems for residential, commercial, and utility-scale applications. 

  • This Investment Tax Credit did launch in 2006 (at that time solar systems were about 3x more expensive than today) as a policy mechanism intended to support the growth of solar energy in the United States. This measure has proven to be pretty useful: creating hundreds of thousands of jobs, gathering more than $140 billion of private investments, and helping the US solar industry to grow by an average 52% annual solar growth for the past decade alone.


... Read the full article 


To learn more about our investment theme "Sustainable Future", click below:


Healthcare M&A

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Sarepta Therapeutics – “Fake” news provides an opportunity


  • Sarepta Therapeutics, a significant position in the Healthcare M&A certificate, announced that an adverse reaction report was “erroneously” submitted to the FDA’s adverse event reporting system (FAERs) regarding its ongoing study of its gene therapy on DMD (Duchenne Muscular Dystrophy). 


  • According to this report, a patient enrolled in the study was hospitalized in February because he developed a case of rhabdomyolysis. The company stated that this report was not sent by the company or the study's principal investigator. 


... Read the full article 


To learn more about our Healthcare investment themes, click below:   



            Biotechnology                 Healthcare M&A                                



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Strategy 101: A Lesson From Apple



Last Friday, 26th of July 2019, Apple has announced that it will acquire Intel’s smartphone modem business for $1 billion. Let’s try to understand the reasons behind this acquisition.


Why is Apple buying Intel’s smartphone modem business?

Whether or not you are a fan of Apple’s products, it is undeniable that the Cupertino company has always designed innovative products and brought new features into the market before its competitors. The company invests heavily ($14.2 billion in 2018 [1]) in R&D, to keep its products, especially the iPhone, ahead of the competition.

All the critical components within an iPhone are designed internally, and this seems to be a winning strategy. All but one: the modem. This exception represents for Apple a big headache that jeopardizes its smartphone business, and this happens during the infancy of the most advanced telecom breakthrough, the 5G.


Reduce the risk of over-dependence on suppliers

In 1979, a professor from Harvard, Michael Porter, defined a framework, where he identified five forces that can impact the profitability of a company [2]: 1) competitive rivalry, 2) threats of new entrants, 3) threats of substitutes, 4) bargaining power of customers and 5) bargaining power of suppliers. This last force is crucial in understanding Apple’s latest move: the supplier’s dependency represents, in fact, a significant issue for the company since it has always relied on external suppliers for this specific part of the phone which connects the handset to the world: first Infineon, then Qualcomm and, more recently, Intel. This reliance has caused troubles and costed money.

For instance, starting from the iPhone 4S model, Qualcomm’s modem equipped iPhones, but the partnership has always been challenging and wrecked among several litigations that mainly orbited around the licensing policy [3] of Qualcomm (see below for details). For its latest smartphones, Apple turned to Intel, but, even in this case, the delayed development of the Intel’s 5G modem chip (XMM 8160) forced the Cupertino company to settle earlier this year the long-standing royalties dispute with Qualcomm. The agreement to pay $4.5 billion, which does not include future royalties [4], was indeed the result of a FOMO effect (fear-of-missing-out): Apple feared of missing the 5G train by delivering the next iPhone below expectations. This could have impacted Apple’s brand negatively and the company would have subsequently lost ground to its competitors (competitive rivalry and threats of substitute).


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Qualcomm business Model

The company generates revenues through two businesses:

1 - QTC, Qualcomm CDMA Technologies, i.e. selling chips;

2 - QTL, Qualcomm Technology Licensing, i.e. charging royalties (fix or variable on the phone selling price, for instance 3.25% of the selling price of branded multi-mode 3G/4G/5G handsets).

While the former impacts more the top lines of Qualcomm, the latter weights more on bottom lines, having an operating margin between 68% to 80%, as opposed to 17% of chip sales.



Getting the last piece of the puzzle

Therefore, the acquisition goes into the direction of diminishing the pressure generated by exogenous factors, such as suppliers, Qualcomm in this case. Rumors have been around since September 2018, but it is the Apple-Qualcomm settlement mentioned earlier that induced Intel to abandon its 5G smartphone modem, having de facto lost its largest customer, Apple. We believe that this deal would accelerate the design of Apple’s custom modem, initially expected for 2025 [5], to 2021 [6]. The acquisition includes a patent portfolio on wireless technologies, 2’200 workers, equipment, and lease.  



The strategy deployed by Apple is straightforward and easy, as it ticks all the boxes of a Strategy 101 exam: on the short term, it copes with lack of a top-notch modem for the next iPhone model, by settling its dispute with Qualcomm, which has, as of today, the best performing 5G modem (see table for other models and players). This move has pushed Intel to abandon its smartphone modem business definitively.  At this point, Apple made public all the rumors about its interest in this business, as this acquisition accelerates the deployment of its long-term strategy: the development of its chip to reduce its reliance on Qualcomm.  The Qualcomm settling that seemed an Apple defeat was indeed a lost strategic battle to win the smartphone 5G war.  




5G modem




Balong [7] 5000 and 5G01

7 nm HiSilicon


South Korea

Exynos [8] 5100

10 nm Samsung


China (Taiwan)

Helio [9] M70

7 nm FF TSMC

Intel (Apple)


XMM 8160 (dismissed)

10 nm Intel



Snapdragon [10] X55

7 nm FF TSMC



Makalu [11] IVY510

12 nm FF TSMC











[1] 10 K form, pag. 27, November 2018













Mobile Payments & Fintech


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Libra... And Now What For Fintech and Mobile Payments?


On June 18th 2019, the Libra project was officially announced to the public after more than one year of development. The plans are for a live deployment during the first half of next year. High expectations are being built on Libra as its primary stated objective is to allow a cheap and immediate exchange of “money”, supported by the making of a global and stable currency based on blockchain technology. When sending $200 around the world the commission costs hoover at around 7% on average: this makes clear the need for a cheaper alternative...


...Click here to download the research paper on Libra


To learn more about our mobile payments and fintech themes, click below:                                     

 Fintech                           Mobile Payments               



Sustainable Future

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The Sun Keeps Shining On The Solar Industry!



Yesterday many solar stocks soared as US solar installations forecast were revised upward in latest U.S Solar Market Insight Report published by Wood Mackenzie and the Solar Energy Industries Association (SEIA). Key highlights of the report include:

US solar installations surpassed 2 million, only three years after reaching the 1 million installation milestone. US industry is expected to reach 3 million installations in 2021 and 4 million in 2023;

Q1 2019 recorded the largest Q1 ever in term of new installations, with 2.7 GWdc of Solar PV installed, a 10% increase from Q1 2018;

A total of 13 GWdc of Solar PV are expected to be installed in 2019, representing a 25% growth (vs. 12% for previous forecasts) compared to 2018;

Total installed US PV capacity is expected to more than double over the next five years.

Despite the 25% tariffs on solar panels imports, Trump’s reluctance to renewable energies, and more generally the US-China trade war affecting imports of many Solar components, deployment of solar PV in the US remains high. As illustrated in below figure, during the first quarter Solar accounted for 51% of all new US power generating capacity, a record!


New U.S. electricity generating capacity additions, 2010-Q1 2019

                                                              Source: Wood Mackenzie Power & Renewables, FERC (All other technologies)                                   



The rapid growth is partly driven by the improving economic competitiveness of Solar PV over other energy sources. In the US many utilities, cities, or states have already committed to 50% to 100% renewable energy, zero-carbon standards and coal plant retirements. Furthermore, the commitment from big corporations (Apple, Google etc.) to clean electricity remains another key driver to the massive deployment of solar panels. 

On the residential level, we are also expecting an upcoming boost supported by new state regulations such as the Californian’s solar mandate on new homes which will require all new residential constructions to integrate solar PVs starting from 2020.

This rapidly growing trend is something that we have foreseen, and which is fully reflected in our asset allocation. In fact, solar-related stocks account for almost 20% of the Sustainable Future certificate.

Some notable names in our portfolio include: Sunpower (a manufacturer of highly efficient solar cells who is benefiting from a tariff exemption on the panels produced outside of the country) and Sunrun (the largest installer of residential solar and storage solutions in the US).

Yesterday’s news is confirming our view on the fundamentals of the Solar PV market opportunity. We strongly believe that this market will keep growing at a pace that exceeds Street’s highest expectations.





Mobile Payments & Fintech

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The Payment Industry’s Third Mega-Merger Of The Year



  • Payment technology companies Global Payments and Total System Services, two of our Mobile Payment certificate positions, have agreed this morning on a stock merger of equals. Global Payments will have 52% of the combined entity and its CEO, Jeffrey Sloan, will run the new company. The transaction will create a powerhouse that provides payment technology and software to more than 3.5 million small to midsize merchants and more than 1,300 financial institutions worldwide. The all-stock deal gives to Total System Services a 20% premium to its closing price on May 23, before Bloomberg first reported deal discussions with Global Payments. The combined entity is expected to generate about $8.6 billion annually in adjusted net revenue plus network fees, with $3.5 billion in earnings before interest, taxes, depreciation and amortization and $2.5 billion in free cash flow.
  • This is the payment industry’s third mega-merger of the year. Established financial companies are trying to compete with new technology players, like Square and PayPal, which offer technology driven services. Building a successful company isn’t just about growth, but it’s also about scale. Scale is about adding revenue at a rapid rate while adding resources at an incremental rate. Resources that are very important to ride effectively the global payments growth that we are seeing. This transaction will give to the new entity vertical market exposure and payment software capabilities. It is imperative in this sector to develop and continually refresh sound payments strategies to remain competitive in a market continually reshaped by new technologies, new competitors and more and more sophisticated customer demand. For these reasons, we totally see the rationale of the deal, even if we are not very excited about the synergies announced. $300m of cost synergies and $100m of revenues synergies are relatively well below the synergies announced for the other two mega-deals. The two companies have less overlaps versus Fiserv and First Data Corporation or Fidelity National Information Services and Worldpay and have some cultural clashes as well. Every mergers have peculiarities and complications, but between the three, probably this one is the riskier. We are evaluating what to do with our positions.
  • Speaking of payments industry in general, someone could see these mega transactions as an indication of maturity for the sector and the end of the buzz. We think this is the opposite. Payment industry was born with the digital era and e-commerce at the end of 90’s. Now the full retail world is on the way of digitalization, it is like a full reboot, and there is still more to come. We are seeing a huge activity on the private market that bodes well for the future. Small technological companies are entering the market with exciting new products, digitalization of transactions is in full swing and we are continuously looking for new investment opportunities.


To learn more about our mobile payments and fintech theme, click below:   




     Fintech                           Mobile Payments               




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AtonRâ Partners Visiting Vivatech 2019


  • Last week, part of the AtonRâ scientific research team traveled to Paris to attend the VivaTech 2019 conference. VivaTech is the European version of the famous Consumer Electronics Show (CES) in Las Vegas: a technology conference gathering big corporate groups, innovation labs, start-ups, and many renowned CEOs. This was a not-to-be-missed event for AtonRâ, which is constantly sourcing knowledge by being in contact with the leading edge of technology.
  • During the 2019 edition, Information Technology, Healthcare and Cleantech have been the three main themes particularly showcased through various conferences, workshops and start-ups. We picked up the best of those and we identified major trends shaping those industries.


Please click here to read the key takeaways from this 2 days’ events.



Biotechnology/ Bionics/ Healthcare M&A

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Every “Medicare For All” Has A Silver Lining



  • Health-care stocks were under pressure after the 2020 Presidential candidate, Sen. Bernie Sanders, went on Fox News on Monday night for a town hall, where audience applauded when asked if they would support “Medicare for All”. But it’s really yesterday that the whole sector sunk after the CEO of the nation's largest insurer, UnitedHealth Group, expressed concerns about Democratic proposals, intensifying investor fears about new regulations.
  • Bernie Sanders has introduced recently a new version of his “Medicare for All” bill that was a keystone of his 2016 presidential campaign, making Medicare available to everyone and basically getting rid of private health insurance at the same time. It’s evident that Sen. Bernie Sanders is trying to use Medicare for All to win over white working-class voters, many of whom supported President Trump in 2016. Frontrunner candidates in the Democratic primary like Sens. Kamala Harris, Cory Booker, Elizabeth Warren have all signed on as co-sponsors to Sanders’s single-payer bill in the Senate.


... Read the full article 


To learn more about our "Health Innovations" investment themes, click below:   



          Bionics                 Biotechnology                 Healthcare M&A                                


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Partnership With The Hebrew University Of Jerusalem  Résultat de recherche d'images pour "hebrew university of jerusalem logo"



We launched a partnership with The Hebrew University of Jerusalem in Israel, where we are sponsoring Toviah Moldwin, PhD student, working on: “Implementation of learning algorithms in realistic model neurons”.

A deep understanding of a computing and learning system such as our own brain requires understanding the computational and plastic functions of its basic components - the nerve cells, their synapses and the specific networks that they form. Their laboratory utilizes detailed computer simulations (as part of the Blue Brain Project) and analytic results to tackle this challenge! In particular the challenge to understand the unique properties of Human cortical neurons and cortical networks.


The goal of this partnership is to understand where the world will be in the coming years thanks to the technology, based on our fundamental and industrial research.

AtonRâ Partners is always looking to exchange information with the labs and the start-ups universe in order to find what will disrupt one industry over another, with the progress of the hardware.


Bionics/ Biotechnology

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iRhythm's Pain = Biotelemetry's Gain


  • In the last few weeks Biotelemetry, one of the largest positions in our Bionics’ certificate, has been under pressure. There is no news to justify this movement except few negative comments from Kerrisdale (NY based Investment management) and Washington Analysis (Independent Institutional Research Boutique focused on anticipating and analyzing changes in public policy) about potential reimbursement cuts for iRhythm, one of Biotelemetry’s main competitors in the Holter monitoring devices market.
  • iRhythm generates almost all of its revenues from the Zio XT Patch, a Long-term/Extended Holter Monitor, which is replacing the 1-2 day short-term Holter monitor with a 14-day patch, providing a better diagnostic yield in difficult cases of Atrial Fibrillation.
  • Biotelemetry, which is the leader in remote monitoring technology, dominates the Mobile Cardiac Telemetry (MCT) space with ~60% market share, with the more obsolete Holter monitoring segment accounting for less than 5% of its total revenue.
  • The reimbursement level for medical devices is associated with a coding process assigned to the analysis of the data generated. iRhythm procedure falls currently under the Category III codes providing for automatic reimbursement for up to 5 years after implementation, after which the code can be transitioned to Category I codes if the underlying procedure has become more widespread and supported by the literature. Devices that are under Category I have normally a much lower level of reimbursement.
  • It is true that iRhythm's historical growth in long-term Holter is being usurped by highly motivated, well-funded competitors who have leap-frogged the Company's technology and Biotelemetry is definitely one of them.
  • If a reimbursement cut comes, iRhythm could lose more than 60% of their sales in one go, and it will open up the market to its competitors. Biotelemetry, in particular, will take advantage of the lower price point to increase its market share in this market.
  • We think that the recent weakness in the stock is not justified by any fundamental reason.  


To learn more about our "Health Innovations" investment themes, click below:   



          Bionics             Biotechnology             Healthcare M&A                                          


Mobile Payments & Fintech

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Wirecard Making The Headlines Again


  • Another day, another FT article on Wirecard and another rebuttal from the German payment processing company…
  • This time around, the FT raises concerns about the quality and even existence of some of Wirecard counterparties in countries such as the Philippines. Like many payment providers, the company uses and shares fees with third-party processors in countries where it lacks the appropriate licences or because it wants to outsource “sensitive” payments (mainly in the gambling and adult entertainment industries).
  • The business with third-party processors accounts for roughly half of Wirecard’s transaction volumes and the FT claims that some of these third-party providers which, officially have substantial business with Wirecard, appear on the ground as modest or even phony companies.
  • Needless to say, this new article confirms our cautious stance on Wirecard. Indeed, we were not totally convinced by the results of the “independent” investigation initiated by the company in Singapore as:
  1. even if the company claimed there will be no material impact on its financials from this review, it also said that some employees may face criminal liability...
  2. the investigation was conducted by lawyers hired by the company and it’s possible that the authorities will not be as complacent in their analysis of the situation,
  3. there are still gray areas, specifically regarding the company’s assets in India which have also been the subject of very critical articles.
  • We currently have no position in Wirecard and consider that at the current EUR111 price, the risk/reward is still not attractive enough (around 50% upside to get to our fair value, but 60% downside in a worst-case scenario). But more importantly, this fair value and worst-case valuation could dramatically go down should accounting irregularities be confirmed and company’s financials need to be restated.


To learn more about our mobile payments and fintech theme, click below:   




     Fintech                           Mobile Payments               




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Video Games Streaming In The Spotlight 


  • As widely expected, Google unveiled on Tuesday, March 19th, its video gaming streaming service called Stadia that will allow people to play high-end games on any connected device (TV/PC/smartphone/tablet) without the need for specific gaming hardware (such as consoles or graphics cards).
  • This initiative, which will launch by the end of the year, will probably start slowly as Google still has to convince on image quality, latency and to announce an attractive pricing and as the game catalogue is likely to be limited initially. In addition, Microsoft and Sony will certainly strike back in coming weeks/months with announcements about their next generation of consoles that are expected to offer massive horsepower, improved virtual reality experiences and exclusive titles.
  • In all, we would expect Stadia to mainly recruit casual gamers in the beginning, with more serious gamers sticking to consoles and/or gaming PCs. That being said, streaming is arguably a secular trend for all media content and it’s likely that streaming will become the norm for playing games and that consoles will disappear by, say, 2025. In our view, Amazon and Apple could soon join the fray with rival streaming services.
  • Against this backdrop, Sony and Nintendo could find themselves at risk due to their reliance on hardware and limited cloud capabilities. But pure video game publishers (notably Activision, EA, Take Two, Ubisoft) could benefit from a huge revenue and margin opportunity in the medium term as streaming offers two major positives:
  1. reduced hardware costs (no need to spend hundreds of dollars on a PlayStation/Xbox anymore) will expand the addressable market to anyone with a connected device, pointing to significant revenue upside for the industry.
  2. the business models will fully shift towards digital (at the expense of physical games) and subscriptions, leading to much more recurrent, visible and profitable revenue. The only caveat is that we don’t have yet a clear view about the sharing of revenues between the publishers and the streaming platforms.
  • In addition, the strategic value of video games publishers could increase as streaming platforms could be tempted to take them over in order to secure exclusive content.
  • While we used to have a large video games exposure in our Innovation portfolio (around 30%), we currently have no position considering that the industry is entering into its traditional technology transition phase (shift towards next-gen consoles), with consumers holding off on games purchases pending the arrival of new consoles. The announced Stadia service will only add to consumers’ confusion in the short term.
  • But clearly, we will look for attractive entry points on publishers in coming quarters as we consider that the long term outlook of video games has never been more exciting with streaming, e-sports and augmented reality acting as catalysts.
  • On a separate note, AMD (a large position in both our Innovation and Artificial Intelligence portfolios) will power Stadia’s graphics in Google’s data centers, confirming its strength in the video gaming industry (the chip maker is already the supplier of graphics cards for Sony’s PlayStation and Microsoft’s Xbox). More importantly, this win gives the company increased traction in the important GPUs market for data centers, which is dominated by Nvidia’s artificial intelligence chips.


To learn more about our Innovation theme, click below:   




Fintech/ Mobile Payments

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M&A In Full Swing



  • Back in January, we commented that the $22.7bn takeover of First Data by Fiserv could kick off a new wave of consolidation in the payment processing industry which is perfectly suited for M&A in our view as it enjoys secular revenue growth (digital payments gradually replace cash) and is highly fragmented and scalable (increased volumes allow to better leverage high fixed costs).
  • We didn’t have to wait long as Fidelity National Information Services (FIS) announced today the takeover for $35bn of Worldpay, a leading US payment processor with a strong online/mobile presence. Worldpay is a large position in both our Mobile Payments and Fintech portfolios.
  • While the deal is a no-brainer from FIS’s standpoint as it provides the company with a fast-growing asset and will allow the company to dramatically improve its growth profile (from 3.5-4.5% currently to 6-9%) and hence its valuation ratios, we have a couple of caveats regarding the premium offered to Worldpay shareholders (+14%) and the expected EBITDA synergies estimated at $700m (or a +13% boost to combined 2019 EBITDA) which are well below the +29% premium offered to First Data shareholders and the $900m synergies announced by its acquirer Fiserv.
  • This could open the door to a higher bid. But admittedly, the odds are pretty low as few players can allow to acquire Worldpay. Among them, we would mention PayPal and Square but our guess is that they are more focused on smaller targets and pure digital players.
  • That being said, the transaction structure as of today (mainly share exchange, plus a small portion of cash) will give Worldpay investors the opportunity to benefit from upcoming EBITDA synergies and EPS upside.
  • Aside from the positive impact on the Worldpay stock price, this deal confirms that M&A is a secular trend in the payment processing industry that should boost the valuation of most assets.
  • Specifically, we remain convinced that European players are attractive targets in light of their rather small size in an industry where scalability is key (their average market cap. is around EUR10bn vs. $25bn for US players) and of their respective positionings. While Worldline is a pure play on Europe that could appeal to global legacy players, Adyen and Wirecard’s large digital exposure has probably already caught the attention of many processors (admittedly, an acquisition of Wirecard would require a thorough due diligence in light of the recent accounting concerns).
  • In the US, Global Payments, TSS, EVO Payments or Euronet could find themselves isolated following the two recent major deals and could hence be tempted by the M&A route.
  • In all, we keep pushing our Mobile Payments and Fintech themes, considering that they offer strong growth prospects driven by the digitization of payments, a low-risk profile (strong visibility, high margins and cash-flows), reasonable valuation multiples (P/E around 20x for double digit EPS growth) and M&A potential.


To learn more about our Fintech related investment themes, click below:   



     Fintech                    Mobile Payments                                                             



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Fintech: Growth and Profitability Go Hand in Hand


  • Surfing on the wave of the digitalization of the economy and taking full advantage of the mistrust of traditional banks following the 2008 financial crisis, Fintech companies are poised to take a prominent place in global finance. In the space of 10 years, these innovative financial start-ups have profoundly transformed the banking industry with fully digitalized services offering extremely competitive costs and ease of use for customers.
  • Banks, which first looked at this development with disdain and indifference, now sometimes play the opportunistic card by cooperating with these start-ups. Both types of actors may indeed find it strategically interesting to join forces: not to miss the train of technology and innovation for some and to access large customer bases for others...


... Read the full article 


To learn more about our Fintech related investment themes, click below:   



     Fintech                    Mobile Payments                                                             


Biotechnology/ Healthcare M&A

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Spark On Fire


  • One of our largest positions in the Biotechnology and Healthcare M&A certificates is making headlines today.
  • Spark Therapeutics (ONCE US) has entered into a definitive agreement to sell out to Roche for $4.8B in cash or $114.50 per share, a 122% premium on Friday’s closing price.
  • The news was first reported during the weekend by the WSJ in an article stating that another bidder was looking at Spark Therapeutics as well (Novartis likely in our view as Spark has a collaboration agreement with the Swiss giant on the commercialization of Luxturna for ex-US markets).
  • With this in mind we believe that M&A activity is likely to remain sustained in coming weeks/months not only in the gene therapies space but also in the Healthcare space overall as another acquisition was announced this morning involving French drugmaker Ipsen SA which is to acquire the rare diseases Canadian player Clementia for $1.31B (70% premium).
  • We time and again stated in our monthly reports and research notes that gene therapies and rare diseases were among the most interesting names to own in the current environment as this is where future growth stands for the larger players. Additionally, we stated that the healthcare industry was ripe for further consolidation as depressed valuations offered an opportunity for those players that were waiting for better entry points to take on the current opportunity. Apparently, this is what has driven Roche’s decision on Spark during the weekend according to the WSJ.
  • Our strategy is to take profits on Spark Therapeutics today in both the Biotechnology and Healthcare M&A portfolios and to redeploy the proceeds into gene therapies names which are already part of our portfolios and to add some names which were on our “shopping” list and which are to benefit from such consolidation.
  • In fact, this is the fourth acquisition in the space following Novartis buyout of AveXis, Celgene takeover of Juno Therapeutics and the acquisition of Celenex by Amicus Therapeutics. Finally, in late 2018, Novartis made an offer on CellforCure. This acquisition was made with the purpose of boosting Novartis’ CAR-T therapy manufacturing capacity as the Group had capacity and manufacturing issues in the past for Kymriah’s.
  • It is quite clear to us that the two Swiss giants are making big bets in the gene therapy world and we are likely to see them active in the “gene-testing” world going forward.


To learn more about our "Health Innovations" investment themes, click below:   



Healthcare M&A                    Biotechnology                                                             



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 Will Intercept win the NASH race following yesterday clinical data?


  • Yesterday, Intercept’s drug, Ocaliva, was the first one to pass its Phase 3 trial for Non-alcoholic Steatohepatitis (NASH, a $22B to $35B market).
  • NASH is a chronic, silent disease that can evolve for many years without visible symptoms. Fat and inflammation in the liver can lead to fibrosis and possibly cirrhosis. Currently, no treatment is approved and the disease could require liver transplant, increase the risk of cardiovascular diseases and lead to liver cancer...


... Read the full article 


To learn more about our "Health Innovations" investment themes, click below:   



Healthcare M&A                    Biotechnology                                                             


Sustainable Future

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The Green New Deal: Climate Change The Nb. 1 Topic For Next US Elections?


  • In the last few weeks, the “Green New Deal” garnered a lot of attention from the US media.
  • The Green New Deal is a broad list of resolutions co-written by senator Ed Markey and representative Alexandria Ocasio-Cortez with the aim to address climate change and economic inequality. The document is highlighting good ideas and goals, is technology agnostic, written in a “wish-list” style, and therefore has no direct policy implications. In other words, it’s a strategical way to bring the climate change topic on the center stage.
  • Democrats chose Climate Change as the main topic that can rally people and spark the interest of constituents for the next US presidential elections in 2020.
  • But what is this Green New Deal about? The answer is: everything (or almost)...


... Read the full article 


To learn more about our investment theme "Sustainable Future", click below:



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Bionics Update: M&A Heating Up In Surgical Robotics, Who's Next? 



  • Yesterday, healthcare giant Johnson & Johnson announced the acquisition for $3.4bn in cash (and additional contingent payments of up to $2.35bn) of Auris Health, a private robotics company focused on detecting and treating lung cancer. Auris’ platform, which received FDA approval last year, uses endoscopy to insert a flexible robot into hard to reach places inside the human body and allows physicians to navigate inside with help from 3D models thanks to video game-style controllers.
  • This deal is a significant addition to Johnson & Johnson’s two robotics assets (Verb in partnership with Google and Orthotaxy) and follows the acquisition last September of surgical robotics company Mazor by Medtronic for $1.6bn, confirming that medtech giants are determined to play a major role in surgery robotics.
  • This is not surprising in light of the rapid adoption of robots by surgeons/patients driven by the accuracy and less invasive nature of procedures and in light of the attractive business models offered by robotics. A robot installed within a hospital will indeed give rise to recurring and highly profitable sales of consumables and/or implants.
  • Even if, for now, most of these competitive initiatives are not aimed at its area of focus, laparoscopic surgery, Intuitive Surgical, the leading medical robot maker will arguably face increased competition in the future. That being said, the company does not stay idle and is also expanding its addressable market through the development of new applications, one of them being… lung cancer detection and treatment, just like Auris.
  • Against this backdrop of strong appetite for surgery robotics assets, we believe that some of the small listed players including TransEnterix ($600m market cap., laparoscopic surgery) and Globus Medical ($4.5bn market cap., orthopedic and spine surgeries), both part of our Bionics portfolio, could consider selling themselves to larger players. While they already received FDA clearance for their robots and have some commercial traction with hospitals, they clearly lack the distribution/sales channels that medtech giants could bring to the table.




Artificial Intelligence & Innovation

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Artificial Intelligence & Innovation Update: Our Stance After The Nvidia Warning 



  • Nvidia was sharply down last night on the heels of a major profit warning (the first one in years), with Q4 revenue outlook cut by 20% and gross margin outlook reduced to 56% from 62.5%. After the cryptocurrency mining weakness in the previous quarter, Nvidia suffered from “deteriorating macroeconomic conditions, particularly in China” in its Gaming division (54% of revenue) and from a “more cautious approach” from data center customers (25% of revenue).
  • The direct impact on our Artificial Intelligence and Innovation portfolios was moderate yesterday (around -50bps) as we materially cut our Nvidia exposure in recent weeks in light of the China and data center risks but, admittedly, the total impact was much larger as Nvidia dragged down many semiconductor stocks that populate the two certificates. That being said, it’s worth reviewing the investment case to figure out if it’s already time to turn more aggressive on the artificial intelligence leader or to exit the position.
  • While the Chinese risk and the datacenter slowdown were well flagged following numerous China-related profit warnings (Apple for instance) and underwhelming figures from datacenter providers such as Intel, the Gaming division’s swing from strong revenue growth in previous quarters to a revenue decline in Q4 came as a shock.
  • We view the current data center slowdown as a speed bump as cloud providers digest massive investments made over recent years and believe that the artificial intelligence revenue opportunity is intact. But we are worried in the short term about the Gaming outlook considering that Nvidia had underestimated the contribution of cryptocurrency mining to the Gaming division last year, that the 2019 lineup of video game blockbusters is poor (and only a few of them will require the ray tracing technology that Nvidia’s graphics cards offer) and that the outcome of trade negotiations between the US and China remains uncertain.
  • Hence, even if Nvidia’s profit-warning clearly resets earnings expectations, there is still downside risk in the very short term (the Q1 guidance is likely to be underwhelming). But as we get closer to the end of the year and to 2020-21, the outlook should gradually improve as comparison bases become easier and as the massive “autonomous driving” catalyst unfolds (a several billion revenue opportunity for the company in the medium term).
  • In all, we’ll stick for now with our small position in Nvidia in light of its leading position in AI and strong fundamentals (pricing power, margin strength) and considering that the focus will soon shift to autonomous driving. But it’s probably a bit too early to aggressively buy the stock and we feel much more comfortable right now in the AI chip space with rivals Xilinx (which benefits from a large telecoms/5G exposure) and AMD (market share gains in the server market at the expense of Intel).




Fintech & Mobile Payments

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Fintech & Mobile Payments Update: M&A Is Back​

  • After the M&A frenzy of summer 2017, it looks like big M&A is back in the payment processing space with the $22.7bn takeover of First Data by Fiserv announced on January 16, 2019, following a string of multi-billion transactions completed in recent months in the non-listed space, including the acquisitions of iZettle and SIX Payments Services by PayPal and Worldline, respectively, and the merger of Nets with Concardis.
  • The transaction multiples are clearly not fancy (13.5x 2019 P/E, well below peers) but this is justified by First Data’s weak fundamentals, as the company is a legacy player (meaning it has a low exposure to online/mobile) growing much less than its rivals (around 5% vs. 10-30% revenue growth on average).
  • Anyway, this transaction could kick off a new wave of consolidation in the industry which is perfectly suited for M&A in our view as it enjoys secular revenue growth (digital payments - credit/debit cards, online and mobile payments - gradually replace cash) and is highly fragmented and scalable (increased volumes allow to better leverage high fixed costs).
  • Despite the initial negative reaction on Fiserv (part of our Mobile Payments and Fintech portfolios), it’s worth noting that the financial rationale of the deal is a no-brainer with Fiserv expecting the acquisition to be more than 20% EPS-enhancing in year one and 40% EPS-enhancing once the full $900m in cost synergies are achieved in five years. Hence, we believe that other companies with sufficient financial firepower will try to expand their digital capabilities and geographic footprint and show off the scalability of their business model through acquisitions.
  • Against this backdrop, European players are likely to attract the most interest in our view in light of their rather small size in an industry where scalability is key (their average market cap. is around EUR10bn vs. $25bn for US players) and of their respective positionings. While Worldline is a pure play on Europe that could appeal to global legacy players, Adyen and Wirecard’s large digital exposure have probably already caught the attention of many processors.
  • In all, we stick to our large exposure to payment processors in our Mobile Payments and Fintech portfolios with a mix of US, European, Asian and South American names, considering that they offer strong growth prospects driven by the digitization of payments, a low-risk profile (strong visibility, high margins and cash-flows), reasonable valuation multiples (P/E around 18x for double digit EPS growth) and M&A potential.



What’s going on and what about 2019?

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What’s going on and what about 2019?


  • Since October, equity markets have been in a tailspin. While until the end of September we were on buy on dips mode, all of a sudden everything changed to a sell on a rally mode. But what has really changed? What was the trigger that made these markets all of a sudden volatile and so unpredictable?
  • While we were on the “a correction might come but not a major sell-off” camp, our comments might be taken with a bit of salt. This crisis reminds pretty much the one we had in 2015, when China started to devaluate his currency. At the time, the US equity markets sold off 10% on average, US high-yield corporate yields soared from 6.5% to over 10% and the 10-Year US Government bonds yields went from 2.5% to 1.5% in just six months.


For more details, please download the full article on the right.




Tech Sector Update

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Tech Sector Update: It's Definitely Not Time To Throw In The Towel 


  • The valuation of Tech stocks and more specifically of semiconductor players (12x 2019 EPS) is close to factoring in a brutal economic slowdown…
  • While a scenario of softer but still robust growth in 2019 is more likely
  • This valuation multiple leaves little scope for hope of a settlement between the US and China or for a reacceleration of the industry growth following the current softening while secular growth drivers are well in place with Tech taking over massive industries (auto, financial services, healthcare)
  • Any temporary revenue growth slowdown and valuation multiple compression could be used as an opportunity to increase exposure to a Tech industry whose weight in global GDP will arguably keep rising over the years


For more details, please download the full article on the right.




Bionic Ears

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Bionic Ears: New Hope For Hearing Loss


Today, Hearing loss affects nearly 5% of the global population and, by 2050, this number is expected to double, mostly driven by a growing aging population and an increasing life expectancy.

The treatment options include Hearing Aids and Cochlear Implants.

Hearing aids are devices typically fitted in or behind a wearer’s ear, designed to amplify the sound. 

Cochlear implants are surgically implanted devices addressed to people with severe to profound sensorineural hearing loss.

The low penetration rate of these devices may represent a strong growth opportunity…



Tech sell-off: Threat Or Opportunity?

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Tech sell-off: Threat Or Opportunity?


The Technology sell-off of the last few days has been quite brutal even if a correction had been in the air for quite a long time with many investors quoting spectacular gains in 2017 and high valuations (we disagree on this) as the main reasons for taking profits or not investing in Technology.

In our view, such a move points to a healthy market and will ease market exuberance concerns as some investors lock in profits and switch to investments towards other strategies they deem more attractive on a risk/return basis and as some others, who were waiting for a correction, will take the opportunity to enter into the space or increase their exposure.

What’s of utter importance when investing, especially in high-growth sectors like the ones we cover at AtonRâ Partners, is to always have a perfect view of catalysts and triggers in order to have a competitive edge.




AtonRâ Bionics Update

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The FDA Move A Breakthrough Moment For Bionics


Contrary to what one might think, governments across the world are gradually becoming supportive  of the Technology and Digital industry and political decisions in the last 12 months have had a tremendous and positive impact on many tech segments.



Innovation and Artificial Intelligence Update

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Electric Vehicles At An Inflexion Point


We have long been playing the electric car & autonomous driving theme in our Innovation and Artificial Intelligence portfolios through positions in specific semiconductor companies and car manufacturer Tesla, considering that the Tesla Model 3 release would lead traditional carmakers to accelerate their pace of innovation and the shipment of electric and smart cars for the mass market.



AtonRâ Fintech Update

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Things Are Moving Fast As Square Applies For A Banking License


Payment processor Square (SQ US) announced last week it would apply for a banking license in the US. Following similar moves from private startups SoFi and Varo Money, this is the first time a listed fintech tries to get the banking status since the US administration’s decision late last year to open up a specific bank charter to fintech companies.



M&A heating up in the Mobile Payment Space

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We have long been saying that the payment processing market (or, more basically, the handling of electronic payment transactions) is highly fragmented and that companies with sufficient financial firepower will try to expand their geographic footprint and show off the scalability of their business model through EPS-enhancing acquisitions.


Trumpxit - And Now?

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Following Donald Trump's election we assess the political and financial consequences and more specifially the implications for our different themes and certificates.


Biotech And Pharma Madness

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After huge pressure on the Pharma and Biotechnology names in October (including our Biotech actively-managed-certificate), the first week of November did not give any sign of relief.


AMD: Remaining upbeat after the Equity Offering

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The headline dilution numbers, as well as the surprisingly high discount on the offering price ($6 vs. a $7.30 price prior to the announcement), arguably drove the stock price pressure. That said, we view this balance sheet repair positively, both on financial and strategic grounds.


Nvidia's Ludicrous Mode

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Impressive revenue acceleration confirms that Nvidia has entered into a new, massive growth cycle. We believe the recent price run does not fully capture the company’s earnings power and that multiple expansion and earnings upside could drive Nvidia’s valuation 25-30% higher.


GOPRO: Beat And Raise Cycle In The Making

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Consensus’ expectation of a 10% growth in GoPro’s action camera segment in the second half of the year (driven by the HERO5 launch) appears extremely conservative in light of similar refresh cycles undertaken by other tech companies. In our view, GoPro is likely to reach the high-end of its guidance (or even exceed it), pointing to at least 9% revenue upside.


Zynga: Margins On The Right Track

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While the market was again disappointed by Zynga’s declining user numbers, we believe that this issue could be fixed soon as Zynga released in early Q3 “CSR2, a racing game which ranks among the top grossing apps on iOS and Google Play in the U.S., and will launch “Farmville: Tropic Escape” in late Q3 and “Dawn of Titans” in Q4. With profitability on the right track, we stick to our view that the company's earnings are at an inflection point.


EA: Gunning For A Strong Holiday Season

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EA’s focus on GAAP guidelines for Q2 and FY17 is likely to create some confusion among investors who have historically handled non-GAAP numbers. That being said, investors should mainly pay attention to management’s high level of confidence about the company’s outlook during the conference call, suggesting that the risk is skewed to the upside. A detailed analysis of the company's product lineup points to 5% revenue upside for FY17.


AMD: Q3 & Q4 Expectations Offer Significant Upside

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For the second quarter in a row, AMD delivered a solid revenue and earnings beat. Investors are likely to shift their focus from AMD's weak balance sheet to the company's numerous growth opportunities and long-term earnings power.