biotech stocks
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This Tiny Startup Has Scored "Microchip Medicine" Breakthrough
A tiny startup has received FDA approval to sell a novel new drug-tracking sensor that could literally save your life one day.
It's a "pill" as big as a grain of sand and it could also mean huge profits for Big Pharma companies in the not-too-distant future.
You see, each year millions of American s throw away tons of unused drugs. What happens is they start feeling better and just stop taking their meds. Eventually those pills get tossed in the trash can.
No one seems to know the full dollar value of all those unused drugs but many experts say this waste costs Big Pharma millions in profits in lost refills.
Not only that, but doctors around the world worry about the rise of drug-resistant bacteria which also stems from patients not taking their full regimen of antibiotics.
It's why doctors always tell their patients to take all their antibiotics even after they feel better. Otherwise, the few germs that manage to survive become more powerful and thwart the effects of stronger drugs taken at larger doses.
Enter a tiny new startup called Proteus Digital Health Inc. The company has developed a new electronic sensor that could transform the way millions of Americans manage their drug intake.
The move puts Proteus front and center in the hot new field of "microchip medicine."
Experts call it that because patients either swallow a microchip that releases doses into the bloodstream or ingest a small medical monitor like the one Proteus makes.
Proteus has the backing of a dozen firms. They include:
- Novartis AG (NYSE: NVS), one of the world's biggest drug makers.
- Medtronic Inc. (NYSE: MDT), a big-cap medical device firm.
- Kaiser Permanente Ventures, the venture arm of the large HMO.
- On Semiconductor (NASDAQ: ONNN), a mid-cap maker of chips and other devices.
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5 Ways to Spot the Next Hot Biotech Stock
It's not enough to understand long- term trends, today's investors need to have the ability to move quickly, especially when it comes to biotech stocks.
But here is what you need to know about biotech stocks: none of them are created equal.
For all their potential, bio tech stocks remain among the most challenging for investors like you to identify, select and earn money on.
However, with a little bit of the right guidance you can narrow your list to the stocks with the highest likely upside.
In fact, I've developed a five- point checklist of what I look at when screening biotech stocks that I'd like to share with you.
It may not be a road map. The biotech sector just isn't that easy and "x" almost never marks the spot.
But it is a great place to start if you are serious about separating the pretenders from the contenders.
Five Steps for Successful Biotech Stock Investors
As you begin to break down a potential stock consider the following as it relates to your decision.
1) Choose your niche.
Biotech is a big term and an even bigger sector. There are literally thousands of companies trying to make their move in everything from vaccines to nano-technology.
There's quite literally no way you can know everything, so stick to the parts of the sector you believe have the biggest potential.
For instance, I think some of the biggest innovations and profits will come from bio tech companies that link living systems with their digital counterparts.
So I tend to concentrate my biotech investments in companies that are exploring synthetic biology and computational bioinformatics.
To me it's a no brainer.
While there is no question that traditional bio tech will be big, over the next few years we will see the line blur very rapidly between what we need to live and how we actually live - aided by technology.
Admittedly, I have a rather selfish reason...
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Six Biotech Stocks Riding the Baby Boomer Wave
The size and scope of the Baby Boom generation has opened up an abundance of health care opportunities --especially ground-breaking and game-changing biotech stocks.
As this "gray wave" matures the need for better treatments for the myriad health problems that often accompany old age only grows stronger.
And while no one has discovered a cure for Alzheimer's, cancer, Parkinson's or other ailments that come along with old age, several biotech companies are racing to cure a long list of diseases and disorders.
The prospects are certainly daunting, but the possibilities in the biotech field are literally endless-for patients and investors alike.
With that in mind, here are six biotech companies that are working on radical and revolutionary drugs.
From A TO Z: Investing in Biotech Stocks
Alexion Pharmaceuticals (Nasdaq: ALXN) is a biotech company that engages in the innovation, development and commercialization of therapeutic products for treating patients with ultra-rare and severe disorders around the globe. The Connecticut-based business focuses on developing products for the treatment of diseases in hematology, nephrology, neurology, metabolic disorders, oncology and ophthalmology.
Unlike scores of other biotech companies, Alexion boasts a strong growth trend and has plenty of cash to fund its research and development.
Most recently, the cutting-edge company received FDA and European Commission approval on its marquee drug called Soliris. Developed for the treatment of a blood disorder called atypical hemolytic uremic syndrome (aHUS), Soliris sales have been growing at a 45% compounded annual growth rate.
Biogen Idec Inc. (Nasdaq: BIIB) works in the worldwide discovery, development, manufacturing and marketing of therapies for the treatment of neurodegenerative diseases, hemophilia and autoimmune disorders. Its key product is AVONEX for the treatment of relapsing multiple sclerosis (MS).
The company continues to advance and improve therapies for MS which afflicts roughly 400,000 in the U.S. and 2.5 million worldwide. Every week, 200 people are diagnosed with the neurological disease in America. Its MS drug Tysabri, marketed in conjunction with Irish pharmaceutical company Elan (NYSE: ELN) had sales of $1.5 billion in 2011.
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Investing in Biotech Stocks: Why the "ASCO Effect" Rally Could Start Tomorrow
Get ready to profit from the "ASCO Effect."
Each June, the American Society of Clinical Oncology (ASCO) hosts its annual meeting - an event that's attended by 30,000 people and the scene of 4,000 presentations.
And each May, just ahead of this crucial gathering, a select group of oncology stocks takes investors on a pretty wild ride - almost like clockwork.
That's the "ASCO Effect."
The catalyst for this big run-up - in which some stocks double, triple or quadruple in price (or more) - is well-known. A few weeks ahead of the meeting, ASCO posts drug-research abstracts of some of the presenting companies on its Website; investors look at the clinical-trial results contained in the abstracts, and key on the most-promising players - igniting share rallies so torrid that they're remembered for years.
This year's ASCO annual meeting is scheduled for June 1-5 in Chicago.
But, according to the latest reports we've seen, the abstracts are due out at 6 p.m. (EDT) today (Wednesday).
If that deadline is met, you can bet that investors will be scouring those abstracts all night.
If you want an example of the ASCO Effect in action, just look at what happened with OXiGENE Inc. (Nasdaq: OXGN) shares just 12 months ago. As May opened last year, OXiGENE was a relatively unremarkable biotech stock. Indeed, the company was juggling a lot of problems.
OXiGENE faced questions about its management turnover and its cash position. Shareholders were worried about its cancer-drug pipeline. And the stock was trading at less than $2 a share.
In fact, OXiGENE shares had been one of the biotech sector's worst performers in 2010, and the company had to endure the ignominy of a reverse stock split in February 2011.
Then came the ASCO Effect.
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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.
Here's why...
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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...
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What is the "ASCO Effect"?
Anyone interested in biotech stock profits should know the answer to this question: "What is the ASCO Effect"?
You see, there's an annual event that offers up some huge trading opportunities, courtesy of the American Society of Clinical Oncology (ASCO).
ASCO's annual meeting always seems to have everyone's ears. That's because its "ASCO Effect" has been known to benefit biotech stocks that reveal news at the conference.
In fact, some stocks surge more than 200% in the weeks leading up to the event.
This year's meeting will be held in Chicago from June 1-June 5 - and some stocks already have started to run.
If you're interested in cashing in on this biotech stock profit opportunity, here's what you need to know.
Importance of ASCO
Created in 1964, ASCO is a not-for-profit organization started by a group of physicians from the American Association of Cancer Research (AACR). They saw a need for a professional oncology society and set out with a mission to "conquer cancer through research, education, prevention and delivery of high quality patient care."
Today, the Arlington, VA-based global organization has almost 30,000 members with 25% coming from over 100 countries. The diverse group includes clinical oncologists from all oncology specialties, sub-specialists and oncology healthcare professionals such as nurses and health care practitioners.
At ASCO's annual four-day meeting, usually held in early June, tens of thousands of attendees share ideas and learn about cancer breakthroughs from therapies and diagnostics. It also includes presentations from more than 4,000 scientific abstracts.
The organization has attracted top clinicians and investigators to administer patient care and conduct research. On its website, the organization boasts that it "will be recognized as the most trusted source of cancer information worldwide."
But it's much more than a source for thorough cancer research. Those in the biotechnology industry keep a keen eye on the ASCO meeting.
That's because of the more than 600 medicines and vaccines developed through biotechnology and clinical trials, a large majority (254) deal with cancer treatments, according to the Pharmaceutical Research and Manufacturers of America.
Behind heart disease, cancer is the No.2 cause of U.S. deaths.
The need for cancer treatments is high with an estimated 1.6 million new cancer cases to be diagnosed in 2012 while more than 577,000 Americans will die from it.
From an economic standpoint, cancer is expensive. The National Institutes of Health (NIH) estimates that the overall cancer costs of 2007 were $226.8 billion.
So for biotechnology companies focused on cancer drugs, this time of year is one that could bring a doubling or tripling of their stock price until the conclusion of the ASCO meeting.
That gain is what has been known as the ASCO Effect.
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Investing in Biotech Stocks: The Buyout Binge Continues
The biotechnology buyout deals just keep coming, meaning those investing in biotech stocks have scored some juicy profits - with more on the way.
Watson Pharmaceuticals (NYSE: WPI) announced Wednesday it would buy competitor Actavis for $5.6 billion- the latest deal in an already-white-hot market for biotech buyouts.
In fact, get this: Although healthcare deals in the first four months of 2012 are down 32% on a year-over-year basis compared with the same period in 2011, biotech mergers-and-acquisition deals are up 38% so far this year.
And biotech merger mania is far from over.
AstraZeneca PLC (NYSE ADR: AZN) early Monday offered to pay $1.1 billion for Ardea Biosciences Inc. (Nasdaq: RDEA).
And Amylin Pharmaceuticals Inc. (Nasdaq: AMLN) - a San Diego-based diabetes drugmaker whose shares recently surged after allegedly spurning a $3.5 billion offer from Bristol-Myers Squibb Co. (NYSE: BMY) - appears to be seeking a buyer.
On Sunday, Reuters reported that Amylin has hired Credit Suisse AG (NYSE ADR: CS) and Goldman Sachs Group Inc. (NYSE: GS) as its financial advisers, and Skadden Arps as its legal adviser.
These deals have been going on all year.
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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 Profits
Late 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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How Online Gamers Can Give Biotech Investors Big Gains
A group of online gamers are onto something big. Very big.
So please don't think these "hobbies" are a complete waste of time and energy.
An online game called Foldit has actually helped to deliver a medical breakthrough that could change the future of biotech research.
How are these two connected?...
It starts with proteins, which are essential to every aspect of our daily lives.
As it turns out, medical research has revealed that serious ailments like Alzheimer's and Parkinson's are linked to proteins - specifically to improperly folded proteins.
Here's why: Think of proteins as tiny biochemical machines that assemble themselves to do certain jobs. The process by which proteins take the shape that governs their activity is called "folding."
Now just imagine how much healthier the human race would be - and how much longer we could all live - if we could make improperly folded proteins fold properly.
It would change the face of medicine.
How Foldit Could Help Change the World
No, the Foldit players didn't go that far. But they did push biotech in an exciting new direction.
Foldit allowed the gamers to "play" at arranging proteins on their home computers. The goal was to win the game by finding the best-scoring combinations, those that used the least amount of energy.
An article in the Jan. 22 online edition of the scientific journal Nature noted that researchers kept the game interesting by posting new multicolored puzzles for the gamers to solve.
In video interviews the players reported a near-obsession with the game.
Not to mention pride in the outcome - they helped the researchers redesign a protein with a nearly 1,700% increase in activity.
This is a classic example of the type of technology that will transform our lives in the Era of Radical Change.
It means that in homes and apartments around the world, gamers could go online to help create The Next Big Biodrug.
For investors that means a new field with lots of opportunities in the near future when scientists begin to work directly with proteins to repair or eliminate damaged cells that can cause disease.
Who knew curing cancer could be so much fun?
They may be able to design personalized and more-precise drugs. They could even stop a deadly flu epidemic in its tracks.
But don't take my word for it...
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