Investing in biotech stocks - My experience so far

BrockStoker

coastline said:

The case for going up ? See what happens with the Fed and rates today but chances are it'll be 0.25% up for a start.

yjhgmJgn (787×572) (twimg.com)

FL44U-yXoAUOOCI (788×366) (twimg.com)

Thanks coastline. Certainly an interesting trading session so far. Just a short while ago a poster wrote on the YF EVFM message board:

"In the spand of 15min...We go from 150k to 1.5M short shares available...Hold the Lone...

Fee Available Updated
23.74% 1500000 2022-03-16 11:00:03
23.74% 150000 2022-03-16 10:45:03

https://www.shortablestocks.com/user/mobile.cgi"

Signs of a turnaround perhaps?! It does look like we have seen the bottom in biotech!

BrockStoker

Not sure if anyone noticed but Friday was a quadruple witching day on the US markets, which is when multiple market related events are scheduled to take place, like rebalancing of indexes and options expire.

So as expected there was higher than average trading volume on many stocks, but one in particular caught my eye - Sorrento who's subsidiary posted great results for it's phase 3 trial of a non-opioid painkiller. While most stocks were around 1-2x average volume SRNE had a volume of 57,446,940 and it's average volume is 8,160,582. Amazingly, after all of that trading, the end result was just +1.16% for the day. I'm guessing it became a target for trading algos, and much of the trading was the same shares being traded back and forth, but everyone seems to be scratching their heads.
In my previous post I mentioned the word "turnaround". But I can't see that realistically happening while there's war in Europe - perhaps, and I hope I'm wrong, but I would not be at all surprised to see more of the same for some time yet.

BrockStoker

Interesting statistics:

From MF: Which company has the biggest covid program?

I'm inclined to say Sorrento has already missed the boat with covid, but who knows? Holding on to my shares anyway!

coastline

coastline said:

The case for going up ? See what happens with the Fed and rates today but chances are it'll be 0.25% up for a start.

yjhgmJgn (787×572) (twimg.com)

FL44U-yXoAUOOCI (788×366) (twimg.com)

Pity the first link isn't available but the second link still works. Well the sector has rallied as the data hinted at. Note I say hint as nothing is guaranteed but probability played out. This is why I post this stuff as it's more than useful. Thing is the general markets are short term overbought so we could still see some fun and games in the next few weeks. $BTK below has to fall nearly 10% to hit those lows and it'll take a fair bit of negativity to do that ? Nothings certain but so far much of the uncertainty has been absorbed. Higher rates, economic slowdown and the ongoing crisis. Good luck.

$BTK | SharpChart | StockCharts.com

BrockStoker

coastline said:

coastline said:

The case for going up ? See what happens with the Fed and rates today but chances are it'll be 0.25% up for a start.

yjhgmJgn (787×572) (twimg.com)

FL44U-yXoAUOOCI (788×366) (twimg.com)

Pity the first link isn't available but the second link still works. Well the sector has rallied as the data hinted at. Note I say hint as nothing is guaranteed but probability played out. This is why I post this stuff as it's more than useful. Thing is the general markets are short term overbought so we could still see some fun and games in the next few weeks. $BTK below has to fall nearly 10% to hit those lows and it'll take a fair bit of negativity to do that ? Nothings certain but so far much of the uncertainty has been absorbed. Higher rates, economic slowdown and the ongoing crisis. Good luck.

$BTK | SharpChart | StockCharts.com

As you say coastline, nothing guaranteed (never know what's round the corner), but certainly looking like the recovery is underway. My portfolio of funds chart is looking like somewhere between a "v" or an extended "W" shaped recovery, and it seems we are back to "risk on" mode. My largest individual stock holding, ARWR, is also popping today.. not really what I wanted - just a few days to go before I can fund ISAs, and it looks like I'll be buying higher than I'd like, again!

Moe_The_Bartender

BrockStoker said:

Lastly, Evofem has been slowly but surely going up since the start of the year. It's one to watch over the next few hours as earnings are due and the expectation is for 1,970.6% YOY growth in revenue.

The main question for me now is, what will I be able to pick up for my limited budget in a few weeks time?!

You can buy a lot more shares. It's now down more than a third since the start of the year.

BrockStoker

Moe_The_Bartender said:

BrockStoker said:

Lastly, Evofem has been slowly but surely going up since the start of the year. It's one to watch over the next few hours as earnings are due and the expectation is for 1,970.6% YOY growth in revenue.

The main question for me now is, what will I be able to pick up for my limited budget in a few weeks time?!

You can buy a lot more shares. It's now down more than a third since the start of the year.

Have to admit, I was nearly tempted, but I think I have enough for the moment. Instead I've been buying AMRS and some SYRS which again is a bit of a gamble.

tom9980

EVFM - they will reverse split likely 15:1 they then need cash so will dilute shares fairly quickly because they need cash to keep going, if they wait they will get shorted to death quickly. I honestly think its a good year until it's investable again. No sign of a partnership in Europe because nobody is offering anything enticing with generic drugs for contraception being so cheap so they need evo100 badly.

BrockStoker

tom9980 said:

EVFM - they will reverse split likely 15:1 they then need cash so will dilute shares fairly quickly because they need cash to keep going, if they wait they will get shorted to death quickly. I honestly think its a good year until it's investable again. No sign of a partnership in Europe because nobody is offering anything enticing with generic drugs for contraception being so cheap so they need evo100 badly.

I agree with your analysis Tom. I might pick up a few more K if the share price enters the 15-20c range, but as you say, it's dead money for the moment. They'll have to get the share price to back over a dollar to avoid desisting, and I can't see that happening by May, so looks like a further drop/s to come.

I'm done buying for the moment, unless I can catch some more AMRS for around $4.20. I think there will be plenty of buying opportunities up ahead, although I don't think we'll see the lows we've seen in the past few months, at least with stocks that are making progress/increasing their sales.

Certainly with biotech, valuations remain ridiculously low for anything that is vaguely speculative. Some interesting commentary on that subject in the latest fact sheet from The Biotech Growth Trust.The gamble with companies like these of course is if they can turn cash positive before the current financial climate sucks the life out of them. I'm confident that AMRS and ARWR can weather the storm, and go on to thrive, so that's where most of my cash is in terms of stocks.

BrockStoker

Amyris has been making significant progress with it's new production facility which will soon be producing valuable ingredients on a truly industrial scale. I'm sure those here closely flowing Amyris will have seen the recent video about the new facilities progress, but it's worth posting here in case anyone missed it:

https://youtu.be/6PwR8hxR3QA

And with the video as a primer, check out what Randy Barron, Portfolio Manager at Pinnacle Associates has said recently in a letter to clients. I won't re post it here, but if you go here and click "newest posts", In The Ruff Research posted the first part (still waiting for part 2) in the last few hours.

I think the next few months will be pivotal for Amyris. It's set to prove that the synthetic biology sector is viable by being the first to produce ingredients this way on an industrial scale - no one else has been able to scale up the way Amyris has, so far at least, because it's not easy to do, and that's good (for Amyris and it's share holders). As pointed out in the letter AMRS has been growing its revenue, especially consumer sales by a healthy clip ($20mm in total sales in 2019 vs $220mm to $230mm expected this year), and this should be reflected at the next quarterly earnings. The new plant will add capacity and fuel future growth, which is already very high. I'm hopeful the share price will return to, and exceed the highs of recent months/years, perhaps before the year is out. It may well drop more in the coming weeks/months and I'll keep buying the dips. I added another 1K earlier when the price was around $4.22 (probably paid closer to $4.26 after bid-spread considerations etc) bringing my total holding in AMRS to over 12K. Aiming for 14K total, but perhaps if I can keep my powder dry long enough I might end up with 15 or 16K or more.