Alkermes and IBM’s Quantum Computing

Dear Mr. Berko: My stockbroker wants me to sell my 100 shares of IBM — which I bought in 2012 at $201 a share, meaning I now have a big loss. He wants me to buy 300 shares of Alkermes, which he thinks will double in a year because several of its drugs may be purchased by Johnson & Johnson. But I’m told that IBM is involved in quantum computers and that they will revolutionize the computer world. I don’t know anything about them, and I need your advice. — DD, Buffalo, N.Y.
Dear DD: Alkermes (ALKS-$58.70) is a $740,000-revenue biotech company headquartered in Dublin, where corporate taxes are lower and you’ll savor the best boxty and barmbrack in the Northern Hemisphere. ALKS has a specially designed 200,000-square-foot plant in Wilmington, Ohio, for commercial-scale manufacturing of its various products, using its proprietary technology platforms.
ALKS researches innovative medicines for central nervous system disorders and has a large pipeline of candidates to meliorate the effects of schizophrenia, depression, addiction and multiple sclerosis. Its key product, Risperdal Consta, is a long-acting injectable version of Johnson & Johnson’s drug Risperdal. Risperdal Consta is administered every two weeks for schizophrenia, which affects 1.5 percent of the world’s population. ALKS earns royalties from J&J’s Risperdal sales plus manufacturing-related revenues and royalties from AstraZeneca for an extended-release diabetes drug.
ALKS has a $600 million tax-loss carryforward and several drugs that management believes will be blockbusters. With 156 million shares outstanding and plenty of cash, it’s little wonder that Citigroup, Credit Suisse, Morgan Stanley, Barclays, UBS, Jefferies and Goldman Sachs are closely watching ALKS. Still, I wouldn’t care to own the stock, because knowledgeable research physicians I trust are unimpressed with ALKS’ pipeline.
I can’t explain why quantum computing works, but I can almost tell you how it works. The key features of ordinary computers — bits, registers, algorithms, logic gates, etc. — have analogous features in quantum computers. For example, a quantum computer has quantum bits, called qubits, which work in an intriguing way. Whereas a bit can store either a 0 or a 1, a qubit can store a 0, a 1, both a 0 and a 1, or an infinite number of values in between — and it can store multiple values at the same time so that they can be in two places simultaneously. And using the principle of superposition (two waves can be added to make a third containing both of the originals), a quantum computer can have a processing speed that is up to 100 million times faster than a conventional computer’s. Think of using a 6-inch ruler to measure a mile versus using a laser.
IBM wants to be the world leader in the quantum computing universe and hopes to produce a working quantum computer in the next three to five years. Nearly a year ago, using the cloud, some 40,000 users ran 280,000 experiments on IBM’s 5-qubit computer. And IBM released a programming interface that enables users to build interfaces between its existing 5-qubit computer and conventional computers. The results are incredible.
Now International Business Machines Corp. (IBM-$155.58) is in the process of building a 50-qubit machine to handle infinitely more complex calculations than today’s supercomputers. IBM is the first big tech company to commercialize what will certainly become a revolutionary new form of computing. So IBM is now inking deals with customers seeking access to quantum computers so they can learn to program this radical new technology. Scott Crowder, who is the chief technical officer for quantum computing in IBM’s systems group, says, “We’re at a stage now where this is going from research plaything to where you really want to look at it from a commercial point of view.”
IBM is on the cusp of being the leader in the quantum computing world. Quantum computing will change the computing universe, just as the iPhone has changed the world of telephony. And several analysts whom I respect believe that quantum computing could add 200 points to IBM’s share price within five years. However, you might consider selling your IBM now to establish a tax loss and then buying it back 31 days later.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.