Investing in biotech stocks - My experience so far

BrockStoker

Voyager2002 said:

BrockStoker said:

moneyfoolish said:

There seems to be a lot of dissatisfaction with the CEO at Evofem and, particularly, with her salary. However, the share price did go up 9.36% on Friday and 5.35% of that was in the last 10 mins before the market closed which, I guess, is positive. Whether that is an upward trend remains to be seen!

I suspected it was just temporary. It'll take good news for it to make a significant move. Hopefully not too long.

Would you call the recent moves "significant"? It is striking that the current market price is below the offer price for new shares. At least the offerin was fully subscribed so they have another USD30 million with which to keep operating.

@Voyager2002 Are you referring to the pop at the end of Friday? I wouldn't call it very significant. I just see it as a vote of confidence from an investor with very deep pockets. Not a bad thing although obviously would have been more significant if more investors had piled in after. As you say, the extra cash helps. Hopefully it's enough for them to get the ball rolling.

In other news, closure of the larger of Amyris's deals announced. Should be an interesting day!

moneyfoolish

BrockStoker said:

Voyager2002 said:

BrockStoker said:

moneyfoolish said:

There seems to be a lot of dissatisfaction with the CEO at Evofem and, particularly, with her salary. However, the share price did go up 9.36% on Friday and 5.35% of that was in the last 10 mins before the market closed which, I guess, is positive. Whether that is an upward trend remains to be seen!

I suspected it was just temporary. It'll take good news for it to make a significant move. Hopefully not too long.

Would you call the recent moves "significant"? It is striking that the current market price is below the offer price for new shares. At least the offerin was fully subscribed so they have another USD30 million with which to keep operating.

@Voyager2002 Are you referring to the pop at the end of Friday? I wouldn't call it very significant. I just see it as a vote of confidence from an investor with very deep pockets. Not a bad thing although obviously would have been more significant if more investors had piled in after. As you say, the extra cash helps. Hopefully it's enough for them to get the ball rolling.

In other news, closure of the larger of Amyris's deals announced. Should be an interesting day!

Thought this would be good news but certainly not impressing the market up to now.

BrockStoker

moneyfoolish said:

BrockStoker said:

Voyager2002 said:

BrockStoker said:

moneyfoolish said:

There seems to be a lot of dissatisfaction with the CEO at Evofem and, particularly, with her salary. However, the share price did go up 9.36% on Friday and 5.35% of that was in the last 10 mins before the market closed which, I guess, is positive. Whether that is an upward trend remains to be seen!

I suspected it was just temporary. It'll take good news for it to make a significant move. Hopefully not too long.

Would you call the recent moves "significant"? It is striking that the current market price is below the offer price for new shares. At least the offerin was fully subscribed so they have another USD30 million with which to keep operating.

@Voyager2002 Are you referring to the pop at the end of Friday? I wouldn't call it very significant. I just see it as a vote of confidence from an investor with very deep pockets. Not a bad thing although obviously would have been more significant if more investors had piled in after. As you say, the extra cash helps. Hopefully it's enough for them to get the ball rolling.

In other news, closure of the larger of Amyris's deals announced. Should be an interesting day!

Thought this would be good news but certainly not impressing the market up to now.

Probably because it wasn't unexpected, and was already baked into the share price. Buy the rumor. Sell the news. Not a good way to make money IMHO!

That said, with the inking of new deals, price targets should go up to reflect improving fundamentals, and share price should follow. Of course there may be some lag, but that's not guaranteed, and it's possible we could see upward momentum building again.

Nice to see the sector rallying today anyway, but bear market rallies can be intense, so I wouldn't take it as definitive sign that normality has resumed, although that is a possibility IMHO.

BrockStoker

This is worth a read. I liked the last part especially.

Biotech emerges as 'superhero' of global pandemic

https://finance.yahoo.com/news/biotech-emerges-as-superhero-of-global-pandemic-144028625.html

mark55man

Hello - been a lurker for a while.  Interested in your comments on this

Over on Citywire forum I did a little looking around for the adventurous portion of my new tax year money and came across Open Orphan (ORPH).  I've put a little bit into it, as I like companies about £100m-£300m.  I've clearly missed some excitement last year and this, but seems to be winning business, although not yet profitable, and has some non core assets for disposal (but I regard those as a bonus if they happen not an expectation).

BrockStoker

mark55man said:

Hello - been a lurker for a while.  Interested in your comments on this

Over on Citywire forum I did a little looking around for the adventurous portion of my new tax year money and came across Open Orphan (ORPH).  I've put a little bit into it, as I like companies about £100m-£300m.  I've clearly missed some excitement last year and this, but seems to be winning business, although not yet profitable, and has some non core assets for disposal (but I regard those as a bonus if they happen not an expectation).

Interesting company. If you'd have asked me a couple of years ago, I'd probably have said "very niche"  (in terms of what it does), but with a pandemic in full flow, it seems "well placed" to gain/grow. It does seem like a risky bet if you only got in recently, but if it's a good company it could do well over the long term. I don't think respiratory illnesses are going away any time soon (though we might be able to get CV-19 under control), so it should be able to get a chunk of the market.

The questions I'd be asking (apart from the obvious ones like "good finances?") would be "where/how good is the competition?" and "what does ORPH do better than the competition that makes it stand out?". I'd say proceed cautiously until you can answer those questions.

mark55man

Thanks @BrockStoker - I'm in at about 1% - so I can live with that risk - I think you are correct though a significant gain over the last 12 months before I joined in is a cause for watching at least in the short term until we see if momentum and progress continue.

moneyfoolish

mark55man said:

Thanks @BrockStoker - I'm in at about 1% - so I can live with that risk - I think you are correct though a significant gain over the last 12 months before I joined in is a cause for watching at least in the short term until we see if momentum and progress continue.

Yes, you need to be careful with these stocks at the moment. I bought a few late in the day (late January/early February) just as growth stocks in general and some biotechs in particular went out of favour and have very large percentage losses although I was careful not to spend more than I could afford to lose. I have Arrowhead, Amyris, Evofem and Avacta and the first 3 are currently down 27%, 12% and 64% while Avacta is my only current winner being up 7%. I don't intend to sell any of them as I still think all except perhaps Evofem have good future prospects but it could be a long wait!

BrockStoker

moneyfoolish said:

mark55man said:

Thanks @BrockStoker - I'm in at about 1% - so I can live with that risk - I think you are correct though a significant gain over the last 12 months before I joined in is a cause for watching at least in the short term until we see if momentum and progress continue.

Yes, you need to be careful with these stocks at the moment. I bought a few late in the day (late January/early February) just as growth stocks in general and some biotechs in particular went out of favour and have very large percentage losses although I was careful not to spend more than I could afford to lose. I have Arrowhead, Amyris, Evofem and Avacta and the first 3 are currently down 27%, 12% and 64% while Avacta is my only current winner being up 7%. I don't intend to sell any of them as I still think all except perhaps Evofem have good future prospects but it could be a long wait!

My worst performer at the moment is SRNE, currently down 43%, but not a big deal since it's a relatively small part of the portfolio. After that is my previous load of 3100 EVFM shares which is down almost 30% (about £1.6K). I say "previous", because I have been taking advantage over the past couple of days, and buying:

300 ARWR

5000 EVFM

250 AMRS

250 BNGO

That leaves me with enough for perhaps another 250 ARWR at current prices, although I may buy something else, depending what this chaotic market throws at us. I nearly bought some SRNE today, but decided to wait and see if it falls a bit more. It's nice to have cash to play with at times like these!

I'm quite liking the new AJB account. It gives you a quote which you can accept or decline (when buying a US security), unlike iWeb which you have to guess your target price, then set it/forget it, which can be a bit hit and miss. Still not entirely sure which way of buying I prefer yet, but one minor annoyance is I can't find the FX rate or USD price per share paid for particular transactions. Either one would be good or it leaves me having to lump all transactions in my AJB together in order to track them via a portfolio tracker like YF. Apart from that minor gripe, I'm leaning towards AJB.

It seems a little easier to find the bottom with AJB. I managed to get in a buy of 1000 EVFM shares while the price was @ $1.73 (according to YF) around 4 or 5 minutes before close earlier. The price had been hovering around $1.74, and giving me consistent quotes, up until it dipped to $1.73, so I accepted the new lower quote. But I can't tell for sure what price I got, only that my average price for my 5k EVFM shares held on AJB went down to $1.81!

It is a bit of a gamble, but I might buy a couple more K of EVFM if there's a further dip, with the intention of holding till $15 or so. I think I might also go for some more BNGO, the reasoning being, the comparative valuation of their direct competitor Pacific Biosciences, and because they are doing what Pacific Biosciences is doing better and for less money. The pull back now is into oversold territory, for a potentially highly disruptive company, so I think at least another 250 shares are in order, especially if the price dips any lower.

BrockStoker

I've been through a number of secondary public offerings now, and only once seen the offering bought into like AMRS is being bought into now. My memory fails me which company that was (MRNA possibly?), but it went on to do very well. This is a very bullish signal for AMRS! I managed to pick up a further 200 shares today, but a further order for another 200 has been sitting there, left in the dust!