Investing in biotech stocks - My experience so far

csgohan4

The website mentioned above, says IAG is overvalued, which is untrue, infact it is undervalued IMO 

Voyager2002

Moe_The_Bartender said:

EVFM still going down while possibility of bankruptcy goes up.

https://www.macroaxis.com/invest/ratio/EVFM/Probability-Of-Bankruptcy

Note that the linked site says very clearly that what they called bankruptcy does not actually mean going bankrupt but is an estimate of the chance of financial stress.

mark55man

I would take these "auto" analyses with a big pinch of salt.  yet my view was that there is no smoke without fire, and given the risk of early stage pharrna companies are large to start with, seeking one out with apparently additional stresses seems like diving into the shark pool, rather than just into the deep end (which I am happy with). 

Voyager2002

mark55man said:

I would take these "auto" analyses with a big pinch of salt.  yet my view was that there is no smoke without fire, and given the risk of early stage pharrna companies are large to start with, seeking one out with apparently additional stresses seems like diving into the shark pool, rather than just into the deep end (which I am happy with). 

The point is that standard metrics (used for example by Stockopedia) ask questions about cash-flow, earnings per share and so forth. Fine for most companies, but in this sector what matters is whether the company can create a stream of products that work. The standard business model is to raise money from a flotation and burn that money on product development and introduction to market. If the money runs out before there are any products the company fails; if the money runs out when the product(s) are commercially viable then the company is taken over and investors cash out; if the product gets to market and succeeds commercially then the company might make the transition to being something where the standard financial analyses make sense.

Basically, no amount of financial information will tell you whether or not a new drug will pass Phase 3 trials, and yet that is what investors most need to know.

BrockStoker

Still some volatility about, but I think there is light at the end of the tunnel. Earnings coming up in May (if not before) should see some good news. In the mean time AMRS is aggressive buying up assets (two companies in as many days) which I think is good for the company, although some other investors appear to disagree.

The big news today was from ARWR, who announced that their new skeletal muscle target was for a type of  muscular dystrophy known as FSHD. Those paying attention already knew that FSHD was likely the new target a few days ago after Coldlander on the YF MB worked it out using a key ARWR employee's linkedin profile! This is actually not a bad target IMHO. It should qualify for "orphan designation" from the FDA and apart from having quite a large patient population for a "rare" condition (IIRC there is a 30,000 addressable patient population in the US alone), meaning it should be fast and be able to pay it's way (although it probably wont be a "blockbuster"), it will server as POC for skeletal muscle RNAi therapies.

Hopefully human trials can begin in the first half of 2022, but first we have to await the preclinical data (due to be presented in June during a conference - if it was bad data it would not be presented at a conference, so it must be at least good, if not great), and the filing to begin human trials, which obviously will depend on the preclinical data.

Almost forgot to add that there's a new article on ARWR on SA which isn't too bad, although there appear to be a few minor flaws:

https://seekingalpha.com/article/4419134-arrowhead-pharmaceuticals-rnai-knockdown-effect

BrockStoker

On the subject of AMRS, I'm even more confident Melo is on the right track. The two acquisitions this week were made not with cash but with stock. So no dilution, and still very healthy cash balance going into earnings, which may surprise some. Those who have been selling may live to regret.

A recent post from the YH MB by Eddy:

"Guy... you are correct.

https://www.sec.gov/Archives/edgar/data/1227255/000136591621000011/xslF345X03/wf-form4_161853111187515.xml

Take a good look at what is happening. Right to buy warrants are in play. If you are not involved with purchasing warrants, you should not be selling the AMRS's stock. Only people that have the option to purchase warrants should be selling, since those people can turn around a purchase the AMRS's stock at a cheaper price via warrants. Everyone else should be purchasing the AMRS's stock on the dip. Why? AMRS will get a lot more funding from those warrants been sold, and that will make the company financially stronger. Just look at the latest purchases and deals AMRS has done, they are expanding their operation, and that indicates stronger revenues. See you above $35.00 a share. Lots of future millionaire on this conversation board. Congrats!"

I'd suggest this is a great buying opportunity, once again, for anyone who has dry powder left. I'll certainly be looking to pick up a few more shares next week.

BrockStoker

It's looking like I've already been proved wrong regarding the ""although it probably wont be a "blockbuster"" comment I made two posts back concerning ARWR's new skeletal tissue therapy ARO-DUX4. Once again someone on the YHMB has figured it out.. The DUX4 gene is also implicated with cancer/the immune system.

https://www.fredhutch.org/en/news/spotlight/2019/09/bs_chew_devcell.html

https://www.fiercebiotech.com/research/how-a-muscular-dystrophy-gene-hides-cancer-cells-from-immunotherapy

This initial indication therefore has the potential to open the door to other indications. If this is indeed the case Arrowhead is thinking way ahead of us/the game, and certainly the market/analysts.

So once again (see post above) we have a prime example of the disconnect between reality and the stock's actual share price.

Now we wait for everyone else to catch up - or try to

BrockStoker

It looks like the FSHD community is a buzz with the news about ARO-DUX4. Muscular dystrophy has no effective treatment or cure, and now, out of the blue and all of a sudden, there is hope for those afflicted. The FSHD organization's website already has posted the news:

https://www.fshdsociety.org/2021/04/15/arrowhead-pharmaceuticals-announces-fshd-drug-candidate/amp/?__twitter_impression=true

There are also some new therapies aside from RNAi which show promise for FSHD, but IMHO none so much as RNAi:

https://www.fshdsociety.org/2021/04/13/a-trio-of-promising-advances-toward-treating-fshd/amp/

I almost downplayed this news, but this is a big moment not just for FSHD sufferers but for ARWR investors too. Once again I'm stoked about the potential ARWR has, and by how fast ARWR is making progress. The stock price is way undervalued right now (should be around $100 at least), and if the coming data releases (due over the next 6-7 months, with most expected earlier rather than later in this period) are as good as many of us expect, then I would not be surprised to see $200 or more by EOY. But keep in mind, the penny has yet to drop for Wall Street like it has done for stocks like MRNA or CRSP, and if it does, I think $200 may be a very conservative figure!

moneyfoolish

BrockStoker said:

It looks like the FSHD community is a buzz with the news about ARO-DUX4. Muscular dystrophy has no effective treatment or cure, and now, out of the blue and all of a sudden, there is hope for those afflicted. The FSHD organization's website already has posted the news:

https://www.fshdsociety.org/2021/04/15/arrowhead-pharmaceuticals-announces-fshd-drug-candidate/amp/?__twitter_impression=true

There are also some new therapies aside from RNAi which show promise for FSHD, but IMHO none so much as RNAi:

https://www.fshdsociety.org/2021/04/13/a-trio-of-promising-advances-toward-treating-fshd/amp/

I almost downplayed this news, but this is a big moment not just for FSHD sufferers but for ARWR investors too. Once again I'm stoked about the potential ARWR has, and by how fast ARWR is making progress. The stock price is way undervalued right now (should be around $100 at least), and if the coming data releases (due over the next 6-7 months, with most expected earlier rather than later in this period) are as good as many of us expect, then I would not be surprised to see $200 or more by EOY. But keep in mind, the penny has yet to drop for Wall Street like it has done for stocks like MRNA or CRSP, and if it does, I think $200 may be a very conservative figure!

The ARO-DUX4 news came out on Thursday, BS, but had little impact on the share price which actually went down on Friday. Would you not have expected this to have an immediate impact?

BrockStoker

moneyfoolish said:

BrockStoker said:

It looks like the FSHD community is a buzz with the news about ARO-DUX4. Muscular dystrophy has no effective treatment or cure, and now, out of the blue and all of a sudden, there is hope for those afflicted. The FSHD organization's website already has posted the news:

https://www.fshdsociety.org/2021/04/15/arrowhead-pharmaceuticals-announces-fshd-drug-candidate/amp/?__twitter_impression=true

There are also some new therapies aside from RNAi which show promise for FSHD, but IMHO none so much as RNAi:

https://www.fshdsociety.org/2021/04/13/a-trio-of-promising-advances-toward-treating-fshd/amp/

I almost downplayed this news, but this is a big moment not just for FSHD sufferers but for ARWR investors too. Once again I'm stoked about the potential ARWR has, and by how fast ARWR is making progress. The stock price is way undervalued right now (should be around $100 at least), and if the coming data releases (due over the next 6-7 months, with most expected earlier rather than later in this period) are as good as many of us expect, then I would not be surprised to see $200 or more by EOY. But keep in mind, the penny has yet to drop for Wall Street like it has done for stocks like MRNA or CRSP, and if it does, I think $200 may be a very conservative figure!

The ARO-DUX4 news came out on Thursday, BS, but had little impact on the share price which actually went down on Friday. Would you not have expected this to have an immediate impact?

In the past, whether or not the share price has reacted to news or not has depended, at least to some degree, on the type of news. In some cases the market deems that the news is good enough for an immediate/significant re-valuation, and other times not so much. In many cases news needs to be digested before the share price reacts.

In this case the news was known to be on the way, just not that the new target would be FSHD. I think we may see a small boost to the share price as the news is fully digested, and a perhaps a gradual run up to the conference in June when we get to see the data. Good data could make it pop then I think. Along with the other data from the likes of ARO-HIF2 and ARO-ENaC we could see a series of pops within weeks of each other perhaps, although you can never know for certain how a stock like ARWR will react to news in the short term. Either way I believe it will continue the long term up trend!

But try not to focus too much on short term price movements. As I was saying to someone else earlier, and I think it's worth repeating word for word, so here is a copy n paste..

The market has a neat trick to fool the unwary, by making something look worthless when it's not (or the other way around). The institutions use this to their advantage, and contribute to it. Share prices (under a certain market cap at least) are just smoke and mirrors effectively, yet many investors make the mistake of basing investment decisions on just that - the big boys just need to start the trend, and everyone else blindly follows thereby perpetuating the trend. So share prices go through a cycle of bouncing between exuberance and despair, with little in between, fueled by investors who don't know what they own or what they are doing.

ARWR is a good example - after peaking a few months back it's down perhaps 25% from it's high due to some taking profits and a "news desert". If you look at the volumes involved they are actually very small, with few shares being traded. The bid/offer spread is also very wide, suggesting that few are willing to part with their ARWR shares. Charts and share price paint a different story, or at least one that is not quite the same.

At times I have seen ARWR and others fall on good news, before recovering/heading up. That's just the way these stocks/the markets are. Perfectly designed to remove money from impatient investors and pass it to those who can wait.