Biotech & Pharma Equity Analysis for Retail Investors
We provide simple written commentary and analysis for investors interested in the biotechnology sector (biotechnology and pharmaceutical companies). These are the most volatile stocks around. This is why we rarely recommend you buy or sell a particular bio/pharma stock. We simply present data points for you to consider for yourself. There are roughly 700 publicly traded bio/pharma companies on NASDAQ with market caps north of $50MM. We cover a small number of these 700 companies and a very small number of those with market caps less than $50MM that are candidates, again candidates, for large share price gains or losses (i.e. CLRB & ARAV). Remember, biotech & pharma companies are one of the few investments where you can lose everything in a matter of days without much warning.
Aravive (ARAV)
For the reasons noted below, biotech has been the worst performing sector of all of the markets since February 8, 2021. Prior to February 8, 2021 biotech was the best performing sector going back to the 1990s. Eventually, once the excesses outlined below have wrung themselves out, we expect biotech to return to being one of the sectors providing the best returns for investors. To provide a perspective on the glut of biotech and pharma related assets available for sale (from FDA approved products to therapies in Phase 1 trials), the CEO of Assertio Holdings on their Q12023 conference call said “I had a recent conversation with a healthcare banker who said, I have never seen so many assets available for sale at one point in the last six to seven years. I’ve been doing this since 2008 and I agree with that sentiment.” Put simplest, our analysis concludes, if one believes in buying low and selling high, now would be an opportune time for long-term investors to begin adding biotech/pharma stocks to their portfolio.
What is the Difference Between a Biotech & a Pharmaceutical?
It is a great question with a very simple answer. A pharmaceutical is a product (usually a medicine) where the raw material components of each product are 100% the same. Most of the time pharmaceuticals are pills. An Advil is a great example. If you were to look at a 200 mg Advil pill today versus one year ago the raw material components would be literally identical from one pill to another. Biotechs produce biological type products where the product, again usually a medicine, are nearly the same one to another but the components are not literally identical. Cell therapies are a great example of this phenomenon. Cells used in biological products are extracted from humans, animals and plants. The cells are close to being the same but they are not identical. Some cells are better suited then others for various reasons. Generally cells used in biologicals are scored using some test or system so they meet a minimum standard. The FDA very closely monitors how biotech companies score their raw material components.
GOING LIVE SOON!!!
