Investing in biotech stocks - My experience so far

BrockStoker

moneyfoolish said:

In spite of the many positive comments I see including broker forecasts, ARWR and AMRS are becoming disaster shares for me. They are just falling day after day. In the case of ARWR, the market seems to have lost confidence in viability of ENAC following the CF setback.

It's frustrating for all of us, and it can't be nice being under water, but it's way too early to say that it's a disaster. Once again, keep focused on the long term, and not distracted by short term share price movements.

It's not just biotech. I don't know if you've been watching Virgin Galactic (it was the first stock I bought, but has since been sold) - over the weekend Branson made it into space, probably the best news the company could have got, yet on Monday it sold off to the tune of 20%!

All I can say is hang in there, and be patient - the market will reward those who do, even though it does not seem like it right now.

Edit to add: After posting the above I noticed that the reason for Virgin Galactic's sell off was actually because they announced a share dilution, so the sell off was not surprising in this case after all.

BrockStoker

@moneyfoolish Have a look at the interactive chart for AAPL. I picked out three times when the share price fell significantly:

In 2003, a decline of around 47%. In 2008, a decline of around 57.5%. In 2013 a decline of around 42.5%.

So, a perfectly good company, yet it sold off heavily at times earlier on in it's history. Those who sold their stock at these times are no doubt kicking themselves now!

It really is no different for ARWR/AMRS and even EVFM (albeit management are not great), apart from the fact that biotech is generally even more volatile. Volatility is normal, and means nothing about the prospects of a company going forward.

Recent posts on the ARWR YFMB once again hit the nail on the head:

Rod:

"For those of you who think this latest drop is so earth shattering, I took a look at the biggest swings over the past 20 months. The numbers may surprise you:

11/29/19 - 3/18/20 ***71.8% decline
3/19/20 - 7/20/20 ***149% increase
7/21/20 - 9/11/20 *** 35.2% decline
9/12/20 - 12/23/20 *** 157% increase
12/24/20 - 3/24/21 *** 26.4% decline
3/25/21 - 6/25/21 *** 43.7% increase
6/26/21 - 7/6/21 *** 30.1% decrease

This is a big boys' ride. If you want to take it, buckle up. Nobody promised you that it was going straight up. While pullbacks are frustrating, they present opportunity. We may not have hit the bottom yet but there's an upcycle looming. Long, strong, and haven't been wrong."

Info:

"Hearing a lot about buy out on the forum. This thought comes from, day traders and investors looking to make the quick dollar. They are totally in ore of the science and invest because they truly believe that this company is going to be bought out!

There are long term investors that are on the fence regarding this issue.

There has been only one previous poster that has nailed it! His name is Holden! Go look at his posts! On buy out and why it’s not going to happen. If so it would of happened along time ago in my opinion.

The clues are there for all to see! You just got to look at the history of this company and it progress in its march to achieve it first commercial drug! But most importantly! The achievement of POC (proof of concept) outside of the liver. ENAC lung, Tumor, DUX 4 muscle, Gout! ??

First there was Amgen that decided to go ahead with there collaboration with Arrowhead even after discontinuing ARC-520! Not sure how much up front payment was. As well as skin in the company regarding share acquisition.

Then there was J&J Hepatitis B acquisition. Huge news, huge investment! One person that foretold this partnership! You guessed it! Holden! The fascinating trend, was that, on both occasions on this fantastic news and more importantly knowing that both companies had over a period of time did there due diligence! The stock declined significantly!

Are you seeing a pattern!??????

Takeda, an amazing collaboration. Forget the upfront payments and stock acquisition. 50% royalties in the USA and 25% around the world! Mind blowing!
What happens? Yes you guessed it. A decrease in stock value! Can you see a pattern forming!

A license agreement with Horizon for ARO-XDH $40 million! You guessed it. A decrease in stock value!

To be honest. I cannot for the life of me , know of any other company listed on any stock exchange that has so much verifiable upside. And I haven’t even included data from AAT reversal fibrosis of the liver, spectacular HIF2 data regarding tumor! ENAC no issues with Human beings, only mild inflammation in rat lung, which I might add is not a human lung. Then we have ARO-ANG3 which is designed to reduce triglycerides and LDL cholesterol in patients with mixed Dyslipidemia. Preliminary data is extremely encouraging!

ARO-APOC3 reduced triglyceride levels by up to 92% with a long duration of effect that was maintained for longer than 12 weeks after the second dose. Importantly, ARO-APOC3 appeared to show consistent activity in various patient populations.

I guess I don’t need to say much more!
As an investor I always look at the facts that are certifiable and always backed up by the governing regulators on what ever space that you are exploring!
Simple! Due diligence!

Best advice. Mute all of the noise and GIFF,s immediately, don’t even respond! What you will end up with is posters that know what they are talking about. Credentials and informative data that is filtered! That may not be perfect every time, however honest points of view!"

tom9980

Potentially very good news for arrowhead if this Chinese website is legit 

BrockStoker

@tom9980 Thanks for the heads up. I'm still playing catch-up, but seems it's legit, so yes, good news! Hopefully the market wakes up now..

moneyfoolish

tom9980 said:

Potentially very good news for arrowhead if this Chinese website is legit 

Let's hope so! They seem to be uncertain on the YMB as many are saying this would have been known by people last week and did nothing to the price. A mixture of anticipation and caution.

BrockStoker

moneyfoolish said:

tom9980 said:

Potentially very good news for arrowhead if this Chinese website is legit 

Let's hope so! They seem to be uncertain on the YMB as many are saying this would have been known by people last week and did nothing to the price. A mixture of anticipation and caution.

It's for real. I'm 99.99% sure. Obviously there's a slight disconnect between news buried deep in China and the west. Not sure if this news will move the needle immediately, but hopefully it should. BTD means a higher chance of approval, as well as a reduced average time to approval, and could trigger milestone payments to Arrowhead as pointed out on the YFMB. That's cold hard cash coming sooner than the market expected, and money talks - it seems WS does not understand much else, but this is a pretty clear message.

The message from China effectively reads: "We've seen the data, and we believe that you have something BETTER than everything else out there, so we will roll out the red carpet for Arrowhead, and try to make the approval process as speedy as possible"

This is coming from the Chinese equivalent of the FDA, and there is a good chance the FDA will also announce BTD in the next few days. China had 84m people with HBV in 2019, and that will have gone up significantly by the time approval comes around (perhaps 100m+), so even if Arrowhead were to only get approval in China, at a modest $1000 per course of treatment, that's already $100 billion in revenue from HBV alone.

So that's big money right there, and just one indication in a large, ever expanding pipeline. The share price will have no choice but to catch up sooner or later. It's always wise to temper expectations for "sooner", but I'm hoping we see some recognition soon!

There's talk about "functional cures" for HBV in Chinese commentary, so that in itself may have some impact - hopefully!

moneyfoolish

What about the impact of this on Arrowhead from the YMB, BS?

"Anyone else see the story headlining Fox Business right now about JNJ contemplating bankruptcy contingencies due to the baby powder lawsuit. They're talking about spinning off the baby powder unit so that the rest of the company is not impacted."

BrockStoker

moneyfoolish said:

What about the impact of this on Arrowhead from the YMB, BS?

"Anyone else see the story headlining Fox Business right now about JNJ contemplating bankruptcy contingencies due to the baby powder lawsuit. They're talking about spinning off the baby powder unit so that the rest of the company is not impacted."

I don't think it's anything to be concerned about, but it's one to keep an eye on. It'll take more than a couple of punches to bring down JnJ, and it's not going to happen overnight. It could even be a good thing for Arrowhead by putting the pressure on JnJ to get alternative revenue streams (like JNJ3989) up and running in order to help cover any liabilities.

moneyfoolish

BrockStoker said:

moneyfoolish said:

What about the impact of this on Arrowhead from the YMB, BS?

"Anyone else see the story headlining Fox Business right now about JNJ contemplating bankruptcy contingencies due to the baby powder lawsuit. They're talking about spinning off the baby powder unit so that the rest of the company is not impacted."

I don't think it's anything to be concerned about, but it's one to keep an eye on. It'll take more than a couple of punches to bring down JnJ, and it's not going to happen overnight. It could even be a good thing for Arrowhead by putting the pressure on JnJ to get alternative revenue streams (like JNJ3989) up and running in order to help cover any liabilities.

I guess that my concern was that JNJ might not be able to cintinue some of the partnership funding to Arrowhead.

BrockStoker

moneyfoolish said:

BrockStoker said:

moneyfoolish said:

What about the impact of this on Arrowhead from the YMB, BS?

"Anyone else see the story headlining Fox Business right now about JNJ contemplating bankruptcy contingencies due to the baby powder lawsuit. They're talking about spinning off the baby powder unit so that the rest of the company is not impacted."

I don't think it's anything to be concerned about, but it's one to keep an eye on. It'll take more than a couple of punches to bring down JnJ, and it's not going to happen overnight. It could even be a good thing for Arrowhead by putting the pressure on JnJ to get alternative revenue streams (like JNJ3989) up and running in order to help cover any liabilities.

I guess that my concern was that JNJ might not be able to cintinue some of the partnership funding to Arrowhead.

A couple more reasons I'm not worried:

- Fox is about as reliable as the Daily Fail.

- None of the seasoned biotech investors on the YFMB (or anyone else as far as I can see) are worried about it. Between them there are 10's of $millions invested in ARWR, so I'm sure some of them would voice concerns if there were any.

Bottom line - even in an unlikely worst case scenario where JnJ started bankruptcy proceedings, that would be some time away, and I think we'd already have approval (the most important thing here), and most if not all milestones. We would likely need a new partner to market and distribute, and that would be a setback, but we wouldn't be short of volunteers, and not all of our eggs are in that basket anyway.