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.
As someone who has tracked this field for more than 20 years, I have to say I'm not surprised that some parts of the bioscience industry are on fire while sectors like natural resources are in the tank.
Gold and silver have quickly fallen out of favor, in no small measure because global economic growth remains in serious doubt.
But biotech is benefiting from Rule No. 3 of my High Tech Wealth Strategy: It's riding unstoppable trends.
Really, it's as simple as this. The world keeps adding millions of new people every year — and none of us are getting any younger.
This odd combination of lots of new children and aging Baby Boomers is giving biotech and healthcare a one-two punch for long-term demand.
We're talking decades of growth…
Not only that, but the industry and the science behind it just keep getting better. They're targeting cancers, diabetes, brain disorders and a wide range of infectious diseases among many others.
No wonder Enanta Pharmaceuticals Inc. (NasdaqGS:ENTA) recently had such a great IPO.
With the biosciences making steady strides, shares of this small-cap are up nearly 50% from the offering price when the stock debuted on March 21.
Enanta has great science behind it and is aligned with Big Pharma. It also is focused on an infectious disease that affects more than 170 million people around the world.
Small Firm Finds Vaccine for Big Problem
Fact is, hepatitis is the leading cause of liver cancer and transplants among U.S. patients. Hepatitis C is of particular concern to doctors and federal health officials.
That's because it ranks as the nation's most common form of chronic blood-borne disease. And the real trouble with Hepatitis C (HCV) is that many don't even know they've been infected, often going undiagnosed for years.
In fact, the federal Centers for Disease Control warns that up to 70% of those who contract the condition have no symptoms or very mild ones. So, they have no reason to go to the doctor and get a blood test.
Health experts believe that about 3.2 million Americans carry HCV in their systems. They estimate the total price tag to the nation at up to $9 billion a year when the costs of hospital care, medicines and transplants are all added up.
Enanta is addressing a big market and is generating a lot of respect for its approach to fighting HCV, for which there is no vaccine. The company is pursuing what it says are four medically validated HCV targets.
It's using agents that tackle viral proteins head on and are known as direct-acting antivirals, or DAAs. Here Enanta is focused on disrupting three proteins critical for the development of HCV.
In the fourth approach, Enanta has an inhibitor that can thwart a key protein in the patient from helping the virus to replicate. The company says its system has "acceptable" side effects and low patient resistance to the compounds.
Now you know how Enanta created the molecular technology behind a promising HCV treatment for the big drug firm AbbVie Inc. (NYSE: ABBV), which boasts a $70 billion market cap.
Known as ABT-450/r, the treatment seems headed for FDA approval because it has performed well in clinical trials to date. The drug is currently in several phase 2 and phase 3 trials.
Analysts note the market for HCV will be competitive, but ABT-450 could reach total global sales of about $3 billion, with Enanta getting $175 million in royalty payments.
At the same time, Enanta also is working on an earlier-stage HCV drug with Novartis AG (NYSE: NVS). With a market cap of $175 billion, Novartis is one of the world's largest pharmaceutical firms.
Enanta's work with these two giants is more than just good branding. It shows the firm has a novel approach that has a shot at getting its drugs to market.
Its access to deep pockets also gives investors confidence the firm won't dilute existing shareholders by taking on too much debt or by going to market with a secondary offering.
No doubt, those factors have kept the stock in an upward trend.
And when you add it all up, you see that Enanta has all the ingredients of biotech success: strong marketing partners, great science and unstoppable long-term health trends.
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About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.