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investing in biotech

How This Biotech Stock Gained Over 3,000% and Trapped Investors

Biotech stock

For biotech stock investors, what happened to Aquanox Pharmaceuticals Inc. (Nasdaq: AQXP) over the past week looked like the ultimate fantasy come true.

After reporting positive results from a mid-stage test for its bladder pain syndrome/interstitial cystitis drug AQX-1125 on Aug. 7, Aquanox stock took off like a rocket. At one point it was up more than 3,000%.

Here's the reason Aquanox stock acted so crazily - and what made it ripe to become a trap for retail investors...

These Promising Cancer Therapies Are a Biotech "Triple Play"


On Jan. 7, 2015, CytRX Corp. announced positive results from a study of its experimental brain cancer drug, aldoxorubicin, and the company's stock immediately jumped 15.8%. Then, over the next four months, it nearly doubled.

Over the months since June 2013, when Clovis Oncology released positive trial data for both a lung cancer and a lymphoma drug, CLVS share value has soared 255%.

And just last summer, when Puma Biotechnology released positive results from a clinical trial of its breast cancer drug, neratanib, PBYI shares jumped 300% in a single session.

It's clear that investors can do very well with the right cancer drug.

But there, of course, is the rub: Finding the right cancer drug is not so easy.

I'm about to show you three companies - all sound investments - running strong in the race to fight this scourge, and the one that could very well take the prize...

Biotech Investing for Beginners: Your 7-Step Guide

Biotech news

Biotech investing can be tricky. The industry is complicated, and the stocks are volatile.

But the profit payoff can be life-changing.

That's why we've created the "Biotech Investing for Beginners Guide" with Money Morning's Biotech Investing Specialist Ernie Tremblay.

That's because many of the metrics we use to evaluate other stocks - like P/E ratio, profit margin, earnings per share - don't always apply to biotech stocks.

Here's Tremblay's step-by-step guide to investing in biotech stocks...

How to Profit from America's $20 Billion Waistline War

Top pharmaceutical companies

Weight loss is a $20 billion per year industry. Yet, it seems the more we spend on shedding pounds, the more pounds we have to shed. Today, two-thirds of adults and one-third of children in the U.S. are overweight or obese, and the numbers are climbing.

With a growing market of that magnitude and so much money changing hands, it's no wonder investors' eyes light up when they hear the words "new obesity drug."

But if you want to find the "gold in those hills," that is, to invest in a stock that will really pay off, you have to know where to look.

Because if you stake a claim in the wrong place, you may lose more weight from your wallet than your waistline...

The Seven Financial Indicators of Highly Successful Biotech Investors

Tech molecule

When evaluating biotech stocks, many key indicators that work for other industries - e.g. price-to-earnings ratio, profit margin, revenue-per-share - often don't apply.

Here's why they don't, and why seven of these critical financial indicators do...

This Blockbuster Drug Has Room to Run

biotech stocks

Editor's Note: We're sharing this Private Briefing with you because it contains a pick that's put Bill's readers up as much as 444% since he first recommended the stock...

Shares of blood-cancer drugmaker Pharmacyclics Inc. rocketed as much as 22% last Tuesday after the company exhilarated investors by forecasting that sales of its key drug would double this year.

We weren't surprised by this, of course.

But even more important was that Private Briefing readers weren't, either.

In a Private Briefing report back in early December, we said the Pharmacyclics blood-cancer drug Imbruvica (ibrutinib) was well on its way to becoming the blockbuster we predicted when we first recommended shares of the Sunnyvale, Calif.-based biotech back in April 2012.

That "call" was right on target.

Late last Monday, after the close of trading, Pharmacyclics said net-product revenue for Imbruvica for full-year 2014 would come in at $492 million. That would include sales of about $185 million in the fourth quarter alone - a hefty "sequential" (quarter-to-quarter) jump of 31%.

But here's the real stunner: For 2015, the company is looking at sales to more than double and reach $1 billion.

For those who want the actual numbers, that's a gain of 103%.

Imbruvica, you see, is shaping up to be the very blockbuster we told you it would be.
And that bodes well for Pharmacyclics shares.

Let's take a look...

This Biotech Stock Winner Has Wall Street Fooled

biotech stock

Today I want to reintroduce you to a biotech stock that Wall Street has been pricing as though it were dead money.

This biotech company recently filed a stellar earnings report. But those earnings were slightly off analyst expectations, and the share price dipped.

But Wall Street's ignorance gives us an entry point the likes of which we probably won't see again for years...

The Best Biotech ETF to Buy Now

biotech stocks

There are more than 1,000 biotech companies in North America alone. They cover a wide range of sectors including pharmaceuticals, biologics, generics, and medical devices.

But finding the right stocks in such a broad industry is no easy task.

That's why we've targeted the best biotech ETF to buy now. It offers investors an excellent way to play the entire industry, without having to pick a specific sector.

Here’s the pick…

Investing in Biotech Stocks: Use This One Simple Strategy to Limit Risk and Maximize Gains

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It's a common thought that investing in biotech stocks is just too risky for the average investor - but that's not the case.

It's true that biotechnology stocks can be very volatile - especially when companies have developmental drugs going through clinical trials - so they aren't the right stocks for every investor. But when investors are able to limit risk, they can find their portfolio's biggest profits from biotech.

Money Morning's BioScience Investment Strategist Ernie Tremblay recommends investors use this one simple strategy when investing in biotech.

It helps limit risk and maximize profits. Take a look…

There Is No Biotech Bubble; Here's the Real Story


Some analysts feel that the biotech sector's recent tumble is evidence of the biotech bubble bursting.

But they're wrong; the market is simply in a period of adjustment.

The premise behind the bubble idea is that biotech companies as a group are overvalued, that their market caps aren't supported by performance. In other words, that their perceived value is all smoke and mirrors.

The problem with that argument is, these analysts are using a mass of technical indicators to support it. Anyone who's followed start-up biotechs knows that's a fool's errand.

Triple-Digit Gains… With Easy "Insurance" Against Risk

Small Cap Penny Stocks to Buy

How do single-day stock gains of 40%, 50%, 75%, even a 100% or more sound? If you're anything like me they sound pretty darn great.

Those kinds of gains happen almost every day, but the mainstream financial media would much rather focus on recent stories such as: FB jumps 14% on increased mobile revenue, GOOG rockets ahead 13% on higher top line, or TSLA up 8% on higher than expected sales of the Model S.

Small-cap biotech stocks can deliver triple-digit gains – or they can crash if clinical trial results disappoint.

Here's how to limit your losses...

The One Thing You Must Know to Hit It Big with a Biotech Stock

When you're evaluating a biotech, or even a full-fledged pharmaceutical company, you'll want to look at its product pipeline, upcoming catalysts, and financial indicators.

But the most important asset it possesses, the heartbeat that drives everything else, is its intellectual property (patent) portfolio...

That's what will make it attractive for acquisition, merger, or licensing deals.

And it's what protects its products from marauding generic drug manufacturers, who will produce copycat therapies and sell them at cutthroat prices.

For a drug development company, that spells disaster.

When a drug goes generic, it's not unusual for the original brand manufacturer's market share to drop more than 40%...

Biotech Stocks to Watch in 2014: Check Out Today's Biggest Movers

Biotech stocks have delivered a healthy dose of returns to investors year to date. The iShares Nasdaq Biotech Index ETF (Nasdaq: IBB) is up a whopping 65% so far in 2014.

That follows a 60%-plus return last year, far outpacing the 30% gain of the broader market. Some 81 biotech companies saw share prices more than double in 2013.

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Bypass These Pitfalls to (Major) Profits in Bioscience

Anyone who's very familiar with the bioscience/pharmaceutical sector will tell you investing in experimental drugs can be an object lesson in volatility.

As the drugs progress toward FDA approval or denial, the stock prices of the companies backing them can be in for the same volatile ride.

A stock's surge or decline is often premised on general assumptions about the likelihood of FDA approval.

But within specific bioscience sectors, that likelihood varies... widely.

That's why I wanted to navigate through some types of drugs that generate a lot of enthusiasm but often crash before delivery.

That way you can avoid some of the downside risk of this often lucrative market...

Cadence Pharmaceuticals (Nasdaq: CADX) Stock Climbs 26% in Latest Biotech Deal


What a year so far for biotech stock profits...

Another consolidation in the active biotech sector came Tuesday when Cadence Pharmaceuticals Inc. (Nasdaq: CADX) agreed to be acquired by Mallinckrodt plc (NYSE: MNK) in a $1.3 billion deal. The move sent CADX up 26%.

Under terms of the deal, Dublin, Ireland-based Mallinckrodt will pay $14 in cash for each share of San Diego, Calif.-headquartered Cadence. That's a 26% premium to Monday's closing price and a 32% premium to the stock's average 30-day trading price.

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