We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Investing in biotech stocks - My experience so far
Options
Comments
-
I won't post last week's numbers as everything is in transition and a little muddled up right now, but once sorted out I'll start again, either next week or the week after.Having said that, the last week was not a bad one (more sideways), with tentative signs towards the end of the week that biotech might be starting to break out. Only little bits of news that have moved a couple of stocks modestly.One Medical has been making good progress it has to be said, especially following the announcement of a partnership:Moderna announced that it was in advanced talks with Israel who wants to purchase their vaccine, which has pushed the share price back up a bit:Lastly, Arrowhead has been receiving some good press (people starting to realize how much potential their platform/pipeline has) which has also lifted the share price modestly: https://finance.yahoo.com/news/arwr-multiple-shots-goal-rnai-133000528.htmlThe small bump in Arrowhead's share price turned out to be quite useful with me transferring the stocks from the SIPP to the ISA - I managed to buy low and sell high. Likewise with the other stocks I was transferring over, apart from Clovis! So far I've manged to buy/sell everything apart from Clovis, which I have been trying to sell for a price which will allow me to keep some Arrowhead, Biocryst, and Amyris shares in my SIPP, but Clovis refuses to oblige, so far at least. Hopefully the share price will recover a little during the next week so I won't be forced to sell at a lower price than I'd like, meaning I'd have to sell some Amyris shares as well to make up the shortfall.I also decided to sell my holding in Reata which had mostly recovered from the slump it had been in for what seems almost as long as I'd held it, and used the proceeds to buy more Biocryst. Of course, the day after selling, Reata was up a further 10% - typical!Overall, I'm really starting to like the way the portfolio is shaping up. I have a lot more confidence in the stocks I'm holding now, and how they are weighted, although I'm still keen to pick up more Arrowhead shares (currently hold 600) and perhaps Biocryst (currently hold 1680).2
-
With my attention diverted due to the transfer, I completely missed the fact that Amicus had snuck up by almost 50% over the last week! It is one of the smaller holdings which till now had not done very much, and I did notice the 8+% pop on Friday, but it wasn't till I went over my portfolio yesterday till I noticed what had happened.Turns out, Sanofi's enzyme replacement therapy trial for Pompe disease (Amicus has been trialing a competing therapy) had mixed results, witch is great news for Amicus which so far has had stellar results with it's own therapy:It looks like the market is wide open for Amicus to capture with Sanofi out of the way.On another note while I'm here, there is another aspect I have been meaning to mention on this thread. Earlier on, at the start of the thread I was warned by at least one poster that secondary offerings/share dilution could be an issue with small biotech investing, and that has indeed been the case. So far Moderna, Biocryst, and at least two or three more (my memory is bad!) companies I hold have had secondary stock offerings.In fact, due to the crisis, secondary offerings have been at record levels in general (not just biotech) as smaller companies try to shore up their balance sheets - in general, companies with less than strong finances have been punished during this crisis so there has been a rush to raise money in the last few months. While share dilution is never a good thing from the point of view of an investor, if it means a company that might previously have gone bust is able to carry on and become successful, then I'm personally not too bothered about it. In at least a couple of cases it's provided a buying opportunity (Biocryst and Evofem for example - luckily I only bought the latter in the dip caused by the secondary offering).So anyone attempting to follow in my footsteps here should pay careful attention to balance sheets, debt, and cash burn rates, but also be aware that secondary offerings can be a good thing if you play the situation correctly.
1 -
Another week, and yet another secondary offering, this time from One Medical. Despite this, my calculations show that overall I'm now up over 50% (20K gain on 40K original investment). While there is still a lot of volatility in the markets in general, biotech, or at least my portfolio, appears to be breaking out. Friday especially was a nice day, with even the biotech index down significantly, my portfolio still managed a solid gain thanks to Arrowhead (significant gains throughout the week - now standing at nearly 50% gain overall, and a total value of 21K at Friday's close), Biocryst (starting to gain some traction/momentum now), and Axsome, which reported FDA breakthrough designation for AXS-05 for the treatment of Alzheimer’s disease agitation. In fact there was quite a bit of good news this week:My only non-biotech stock, Virgin Galactic announced a deal with NASA, and completed a successful test flight:Agenus entered into a licensing deal with China, as well as reporting some promising early data:There was also positive preclinical data from Verastem:CRISPR annonced the building of a new state of the art facility:
https://finance.yahoo.com/news/crispr-therapeutics-announces-build-cell-120010047.htmlClovis announced some extremely encouraging preclinical data:Pretty amazing data if it translates to humans! Even so, I'm still trying to sell the Clovis shares I hold in my SIPP account. I've come within a few cents on at least a couple of occasions, but it seems like the current level of resistance is just about where I want to sell. I've started to lower my target/expectations, so hopefully I will sell the stock in the next week, even if I have to take a slight hit.Lastly, Moderna announced a vaccine manufacturing deal:I had been waiting for another pop in the share price, but ended up selling all my Moderna stock for a ~320% profit on Friday as I'm less confident now that a vaccine will make much difference, so I'm expecting Moderna's share price to collapse at some point, and if it does, I may buy back in. This article lays out the reasoning behind my decision, and why I'm also considering buying some Gilead stock again:0 -
Thanks for taking the time to post this. Interesting reading
Total - £340.00
wins : £7.50 Virgin Vouchers, Nikon Coolpixs S550 x 2, I-Tunes Vouchers, £5 Esprit Voucher, Big Snap 2 (x2), Alaska Seafood book0 -
Glad you found it interesting doe808.I do have to admit here, after going through the numbers again this week, I realized that I had neglected to take into account £3.6K that I had not contributed. It was included by mistake, thus inflating my gain by an equal amount. So last week I was actually a few K short of 50% total gain. The good news is that is not the case this week! If I take out the £3.6K, that leaves me with a total portfolio value of £60128.2 according to Yahoo Finance, 40K of which was my own contributions.I've also noticed another aspect with YF portfolio tracker that is a source of error. When I enter the average price per share YF does not allow me to enter all the decimal places, meaning I have to round up the value I enter in something like 95% of cases. The result is that YF is underestimating my profits. I'm not sure by how much exactly (probably isn't more than a few hundred I suspect), but I will make a note to compare valuations and find out the difference in the near future. I will also start to take my numbers from the platform itself, although this means I won't have them for Friday's close till Monday. That may have to wait though since I may be going away this Monday, so the first time will probably be Monday week.The other good news is that I managed to complete the transfer of shares from SIPP to ISA during the last week. I took a risk by attempting to wait for the Clovis share price to recover, which would have meant all I had to sell was Clovis stock. That didn't happen, so I ended up having to sell around £400's worth of Amyris stock (120 shares) as well as the 600 Clovis shares I held in the SIPP. Just glad to have that all out of the way, and not to have ended up significantly down because of it thanks to buying first (in a falling market) and then selling (during the recovery). Of course for that to happen I did have to "cheat" a little, by having 60K invested at one point, but the extra 20K is now sitting in my SIPP cash account, waiting for AJ Bell to return it to my bank account. It was only possible because I had not used my annual S&S allowance till that point, and luckily I had the cash in my bank account.The other significant change I made to my portfolio in the last week was to sell my CRISPR stock. It had just popped, and I'm no longer as confident in it's technology as I was previously - certainly compared to other genetic manipulation tech like Arrowhead's platform, it is a relatively blunt tool, and that does make me worry about possible unintended side-effects that might make themselves known a few years down the line. So it seemed like a good time to let it go, and with the combined profits from it and Moderna I bought more Arrowhead + Evofem shares. It may well be that CRISPR (and indeed Moderna) continue to do well for a while, but I think Arrowhead + Evofem present much better opportunities in the near term, and even more confident that the outlook is even better in the long term.There was not much news this week (4th Jul probably mostly to blame), but there was this which relates directly to Arrowhead (which I also posted on another thread in this forum): https://www.studyfinds.org/accidental-discovery-leads-to-parkinsons-disease-cure-in-mice/The article suggests that Parkinsons is an indication that Arrowhead will be able to target through it's platform, and if the results in mice translate to humans (very lightly IMHO going on previous trial data for siRNA indications), they will have a Parkinsons cure on their hands. That would be HUGE (on many levels, not just the money involved), as no one has even come close before now. I have no doubt that management will be taking the necessary action to include this indication in their pipeline ASAP - it's too big an opportunity to pass up.There was also news of an award and a new partnership for Amyris:The share price has been creeping up significantly over the last few days.Also not officially announced yet, but Evofem's new contraceptive gel has already been accepted by at least two healthcare providers in the US, and they have been ramping up in preparation for the official launch (and advertising campaigns) over the next few weeks. They published this letter to stock holders:Edit to add:Almost forgot to add that there was also good news for Biocryst, which announced that the patent for it's HAE drug had been extended through to Oct 2039:Lastly, here is what the portfolio is looking like in terms of stock weighting (largest first):ArrowheadBiocryst10x GenomicsOne MedicalAmyrisEvofemVirgin GalacticClovisCerusAgenusAxsomeOmerosAmicusVerastemAimmune0
-
EdGasketTheSecond said:He's a budding WoodfordIt's funny you should say that. It turns out, one of the companies I bought recently, Evofem, was apparently a holding in WPC. I was unaware of this when I bought my first Evofem stock, but found out after the price dip (which I used to buy), which was attributed to the liquidation of the fund's assets.Having said that, you really shouldn't mock Ed! My investments have done quite well, and this portfolio especially. How are your doing after you liquidated?1
-
Looks like something is going on with Biocryst right now. The rumor is that there is some big covid-19 related news due this week that will "move the markets". See the top post here:..and it appears that BCRX is expecting the type of data the news refers to, with it's anti-viral. Also BCRX is suddenly one of the top trending tickers (at least on YF), currently at 3: https://finance.yahoo.com/trending-tickersI believe there could be a "Moderna like" pop on the way!0
-
BrockStoker, would you please share your knowledge how you screen these stocks. What tools, method robo software are you using ? The problem here is that it is difficult to find analysts or Robo analyst opinions about them because of lacking of information.BrockStoker said:Glad you found it interesting doe808.I do have to admit here, after going through the numbers again this week, I realized that I had neglected to take into account £3.6K that I had not contributed. It was included by mistake, thus inflating my gain by an equal amount. So last week I was actually a few K short of 50% total gain. The good news is that is not the case this week! If I take out the £3.6K, that leaves me with a total portfolio value of £60128.2 according to Yahoo Finance, 40K of which was my own contributions.I've also noticed another aspect with YF portfolio tracker that is a source of error. When I enter the average price per share YF does not allow me to enter all the decimal places, meaning I have to round up the value I enter in something like 95% of cases. The result is that YF is underestimating my profits. I'm not sure by how much exactly (probably isn't more than a few hundred I suspect), but I will make a note to compare valuations and find out the difference in the near future. I will also start to take my numbers from the platform itself, although this means I won't have them for Friday's close till Monday. That may have to wait though since I may be going away this Monday, so the first time will probably be Monday week.The other good news is that I managed to complete the transfer of shares from SIPP to ISA during the last week. I took a risk by attempting to wait for the Clovis share price to recover, which would have meant all I had to sell was Clovis stock. That didn't happen, so I ended up having to sell around £400's worth of Amyris stock (120 shares) as well as the 600 Clovis shares I held in the SIPP. Just glad to have that all out of the way, and not to have ended up significantly down because of it thanks to buying first (in a falling market) and then selling (during the recovery). Of course for that to happen I did have to "cheat" a little, by having 60K invested at one point, but the extra 20K is now sitting in my SIPP cash account, waiting for AJ Bell to return it to my bank account. It was only possible because I had not used my annual S&S allowance till that point, and luckily I had the cash in my bank account.The other significant change I made to my portfolio in the last week was to sell my CRISPR stock. It had just popped, and I'm no longer as confident in it's technology as I was previously - certainly compared to other genetic manipulation tech like Arrowhead's platform, it is a relatively blunt tool, and that does make me worry about possible unintended side-effects that might make themselves known a few years down the line. So it seemed like a good time to let it go, and with the combined profits from it and Moderna I bought more Arrowhead + Evofem shares. It may well be that CRISPR (and indeed Moderna) continue to do well for a while, but I think Arrowhead + Evofem present much better opportunities in the near term, and even more confident that the outlook is even better in the long term.There was not much news this week (4th Jul probably mostly to blame), but there was this which relates directly to Arrowhead (which I also posted on another thread in this forum): https://www.studyfinds.org/accidental-discovery-leads-to-parkinsons-disease-cure-in-mice/The article suggests that Parkinsons is an indication that Arrowhead will be able to target through it's platform, and if the results in mice translate to humans (very lightly IMHO going on previous trial data for siRNA indications), they will have a Parkinsons cure on their hands. That would be HUGE (on many levels, not just the money involved), as no one has even come close before now. I have no doubt that management will be taking the necessary action to include this indication in their pipeline ASAP - it's too big an opportunity to pass up.There was also news of an award and a new partnership for Amyris:The share price has been creeping up significantly over the last few days.Also not officially announced yet, but Evofem's new contraceptive gel has already been accepted by at least two healthcare providers in the US, and they have been ramping up in preparation for the official launch (and advertising campaigns) over the next few weeks. They published this letter to stock holders:Edit to add:Almost forgot to add that there was also good news for Biocryst, which announced that the patent for it's HAE drug had been extended through to Oct 2039:Lastly, here is what the portfolio is looking like in terms of stock weighting (largest first):ArrowheadBiocryst10x GenomicsOne MedicalAmyrisEvofemVirgin GalacticClovisCerusAgenusAxsomeOmerosAmicusVerastemAimmune
Many of Biotech stocks are Penny Stocks. Penny Stock are very high risk and quite often subject to Pump and Dumb, Insider trading. The problem here is that you will need to be extremely lucky to win a trading against the insider traders. But of course it is also very high reward if you are lucky.
0 -
BrockStoker, would you please share your knowledge how you screen these stocks. What tools, method robo software are you using ? The problem here is that it is difficult to find analysts or Robo analyst opinions about them because of lacking of information.There's no easy option to be honest. I don't use any tools as such, I just keep my eyes open, and look for companies that have a pipeline of drugs/products that I think holds great potential. Once I find that, I dig further, looking at finances etc to make sure the company stands a good chance of bringing those drugs to the market. Only then do I buy if I'm happy. Robo-advisors/algorithms are useless with biotech.A good source of initial ideas is here:However, I just use it to identify what I think is interesting, and I would not rely on article writers/analysts alone as they often miss things. Thinks like Zachs are near useless as far as analysis goes, but might bring something to your attention, but that's it.One of the main problems is that small biotechs are hard to value correctly because drugs may not get approved, or if they are, they may turn out to be worth more (or less) than expected - it's not an exact science. Especially when cutting edge technology is involved that has not been fully proven, it's possible to have a undervalued valuation one day, and then overnight, after a data release, it could be valued at double what it was. Arrowhead is in this category I think. While this is a problem, it's also the reason that significant numbers of biotechs are undervalued, and why there is a potential to make money if you know what to look for. Wall street is not good at valuing small biotechs! You can look at what institutions are buying (it can offer hints/clues) as they seem to be better at knowing what to go for, but there is no guarantee that they will be right.In short, I think to have an idea what to pick, you need to have at least a basic understanding of the sector, and know enough about medicine to recognize when a new tech/drug looks significantly more promising than the rest of the competition. It can be learned over time, if you immerse yourself in the sector, and you read/research, which is what I have done for some years now.For those reasons, it's not for everyone, but at the same time, it is possible to learn what you need to know, if you are sufficiently motivated/interested.Keep in mind I've only been investing in individual stocks for around 8 months now and I'm still learning. I don't know if my strategy will ultimately be successful. It seems to be working so far however.Remember also that I managed to buy many of my stocks when they had very depressed share prices (I managed to find the bottom on a few), so a simple recovery of the sector has helped my portfolio a great deal. I can't discount entirely that some luck has helped me get thus far (certainly in terms of timing/when I bought).Read this thread through (at least once), and come back if you have any questions.Many of Biotech stocks are Penny Stocks. Penny Stock are very high risk and quite often subject to Pump and Dumb, Insider trading. The problem here is that you will need to be extremely lucky to win a trading against the insider traders. But of course it is also very high reward if you are lucky.I would generally try to stay away from the cheapest stocks as they are so risky, at least till you gain some more experience of the sector. I did take a risk with perhaps 3 or 4 stocks under $5 to begin with - but was careful not to invest too much (at least initially) as they were risky. One failed (ran out of cash), two have made reasonable progress, and the other (BCRX) looks like it's about to explode, but I could never have predicted that (at least to begin with - as I got to know the stock better, and my confidence in it grew, I invested more)!The big problem is cash burn with biotechs. If you buy small, there is a very good chance of share dilution or in the worst case, bankruptcy, even if they have a great product. I don't think insider trading is a problem, although biotech stocks are a favorite for institutions to short. That can present buying opportunities, and as long as you have a stock you are confident in, it's just a matter of holding for the long term (or till there is a pop). Trying to "trade" them is more risky. IMO the big gains are more likely to be had if you are patient. It's the most common mistake I see reading the message boards - people expecting it to go up every day, and if it does not, they jump ship, often to find it goes up after they sell.Tip: Don't go all in on your first buy in any one stock, and wait for a good entry point or entry points. That will at least provide some degree of safety by limiting potential losses. It's tempting to dive in at the deep end because of FOMO when you first find something you thing is great, but in my experience this is usually a mistake. I try to initiate a small position to begin with, and then try to average down by buying any dips. As you get to know a stock better, you can initiate further positions if you like what you see.Further tips: Try to only invest in what you understand, and know what you own. Read all you can - message boards (obviously don't believe everything you read), quarterly reports, etc.Good luck!Edit to add:Also, be careful not over-stretch yourself (as I did initially) by buying too many stocks. Remember, you need to keep an eye on not just them, but the competition too. Too few stocks is not a good idea either, unless you are VERY confident in your abilities.3
-
These were my questions as well, so thank you for responding. A couple more: how do you control trading costs? Do you use a platfom that offers a number of free or low-cost trades each month? And what background did you start with in Bioscience and Medicine?adindas said:
BrockStoker, would you please share your knowledge how you screen these stocks. What tools, method robo software are you using ? The problem here is that it is difficult to find analysts or Robo analyst opinions about them because of lacking of information.
0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.2K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.7K Spending & Discounts
- 244.2K Work, Benefits & Business
- 599.2K Mortgages, Homes & Bills
- 177K Life & Family
- 257.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards