biotech stocks awaiting fda approval
Forget gold, forget oil, and forget the S&P 500.
If you want to make big money in the market today you have to look to biotech.
In fact, if you ignore this field, you're going to miss some of the market's biggest stock gains.
That's because what happened earlier this week is going to become the norm.
On Monday, of the top 25 Nasdaq advancing stocks, 12 were straight-up biotech plays and another was a small-cap healthcare concern.
Their one-day gains ranged from 8% to 47%. Not bad for a day's trade.
Why the Pentagon Wants to Use This Penny Stock to Cure the Flu
A tiny clinical-stage biotech firm is pioneering a ground-breaking new way to fight the flu.
Their process is so radical it has caught the eye of DARPA , the shadowy research and development arm of the Pentagon.
What makes their process so unique is that the company uses tobacco plants instead of eggs to produce the recombinant proteins that are the key to vaccines.
Its goal is to dramatically cut the time it takes to manufacture vaccines, which can take as long as nine months to put into production.
In fact, in a key test of the firm's technology DARPA recently ordered 10 million doses of a vaccine candidate as part of a $21 million project.
By all accounts they came through with flying colors, delivering 10 million doses of the H1N1 influenza vaccine in just one month.
So who is this ground-breaking new vaccine company?
It's a tiny Canadian-based firm called Medicago Inc. (OTC:MDCGF; TSX:MDG).
Biotech Stock ETFs: How to Ride the Surge in Biotech Mergers & Acquisitions
Innovations in biotechnology are evolving at the speed of light.
In fact, astonishing advancements in biotech have transformed the way we practice medicine. Leading-edge biotech products and breakthroughs are literally saving thousands of lives every day.
Needless to say, biotech stocks can be strong medicine for investors, too.
For instance, the Nasdaq Biotechnology Index rose 457% from the end of August 1998 to the end of February 2000. Going back even further to the early 1990s, biotech stocks have soared by 1,347%.
Think about it... for biotech investors every $10,000 invested turned into nearly $140,000.
The good news for investors is that after slumping during the recession, biotech stocks are making a comeback. In the first quarter of 2012 alone, the Nasdaq Biotech Index gained 18.2%
And conditions are setting up for even better gains in the future.
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Investing in Biotech Stocks: The Latest Buyout Candidate
The biotechnology buyout binge continued this week, driving profits for those investing in biotech stocks.
The sector's latest M&A news picks up a story that began in April, when Human Genome Sciences (Nasdaq: HGSI), the U.S. pioneer of gene-based drug discovery, rebuffed a $2.6 billion bid from Britain's GlaxoSmithKline (NYSE ADR: GSK).
Human Genome argued the unsolicited bid did not reflect the company's inherent value. GSK adamantly insisted its bid, an 81% premium when settled upon on April 18, is full and fair.
UK-based GSK is not taking the rejection sitting down...
Biotech Stocks: How to Invest in the Buyout Binge
Big drugmakers are scrambling.
Right now, some of their most-lucrative blockbuster drugs are coming "off patent" - meaning they face the loss of $170 billion in annual sales.
But I'm going to let you in on a secret that Wall Street investment pros hope the little guy never learns: The very same problem that has Big Pharma execs wringing their hands even as you read this is also creating one of the biggest profit opportunities we've seen in years.
To show you what I mean, allow me to tell you two quick stories.
The Secret Path to Biotech ProfitsLate in my business journalism career, I spent three years covering the biotech sector.
Let me tell you: That reporting job brought me to a very quick understanding of just how challenging this business really is.
Wall Street and Big Pharma executives beat the drum about their successes - the new "miracle drugs" that treat or cure obesity, arthritis, depression and cancer. We hear about those achievements all the time.
What I found in my reporting, however, was that the failures dwarf the success stories.
The failure numbers are actually downright mind-numbing.
For every 1,000 "compounds" (drug candidates) that enter laboratory testing, only one will ever make it to human testing.
Indeed, once a company develops a drug, it's usually looking at about three-and-a-half years of testing in the lab before it can even apply to the U.S. Food and Drug Administration (FDA) for approval to begin testing in humans.
Of all the drug candidates that enter Phase I trials - the first of three phases that mark the path to FDA approval - only one in five ever makes it to market.
The bottom line, as I discovered, is this: It can take 10 to 12 years and $1 billion or more to develop a new drug.
For Big Pharma CEOs who are staring at eroding patent coverage and searching for replacement blockbusters, that's too much time and way too much risk.
They're not abandoning internal drug development. But they're also pursuing an alternative strategy: Sniff out the small players already developing the new potential blockbusters and either buy the drug, or buy the company outright.
That urgent multi-billion-dollar shopping spree is going on right now... boosted to the max by a need to keep boards and shareholders happy.
As Merck & Co. (NYSE: MRK) CEO Kenneth Frazier recently told an investor group: "My goal is to augment the pipeline. The way to augment is to find those assets that we can acquire."
That's easier said than done.
For one thing, Big Pharma/Big Biotech companies are fat with cash. That means there's a lot of competition in the search for new drugs or entire companies to buy. For another, there's a "scarcity of growth assets," as Goldman Sachs Group Inc. (NYSE: GS) said in a new report.
Although that supply/demand scenario is a tough one for Big Pharma, it's a terrific one for investors like us: It puts pressure on the suitors to buy whatever's available. And it means the prices will be high when they do.
And, as my second story demonstrates, those deals do happen.
In fact, our subscribers recently reaped a big payday from just that kind of deal.
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