By the standard of today's mega-mergers, a $4 million investment seems like pretty small change.
Especially in the $1 trillion global healthcare industry.
You see, Johnson & Johnson Inc. (NYSE: JNJ) recently joined with a private-equity firm to invest that "measly" sum in AnTolRx Inc., an early-stage biotech that uses targeted nanoparticles to treat a range of illnesses, including autoimmune diseases and diabetes.
Perhaps because the deal is so small, it went completely unnoticed on Wall Street. And that's fine with us, because at Strategic Tech Investor we crush the market by getting out in front of the Street.
More to the point, this seemingly small investment speaks volumes about a key tech investing trend that most so-called "analysts" have largely ignored.
I'm talking what I call "Biotech's Quiet Comeback." Fact is, four main catalysts have driven this sector upward by 16% in recent weeks.
Today, I'm going to reveal these four major catalysts.
And I'll show you the single best way to play this silent but lucrative trend…
Don't Tell Anyone About This…
Let's put the biotech sector's huge recent gains into some perspective. Since the market hit its post-Brexit bottom on June 27, the bellwether Dow Jones U.S. Biotechnology Index has gained roughly 16%.
That's more than double the returns we've seen from the overall market. The Standard & Poor's 500 Index has increased by just 7% during the period.
Biotech's rebound comes after the sector sold off for several reasons last year, falling 31% from late July 2015 through February 2016.
But since then, I have seen four factors at play that account for the sector's quick turnaround. Take a look…
Biotech's Quiet Comeback Catalyst No. 1: Drug Breakthroughs
Whether it's the kind of early-stage investment that Johnson & Johnson just made in AnTolRx or late-stage drug pipeline news, the sector is set up to profit from a series of breakthroughs.
Take the case of Keytruda from Merck & Co. Inc. (NYSE: MRK). This drug could turn the tide against cancer by altering how our immune system responds to cancer cells. On Sept. 6, the U.S. Food and Drug Administration said it will consider approving the drug as a first-line defense against lung cancer. That came just a few months after the agency approved it as a second-line defense.
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Plus, Sanofi SA (NYSE ADR: SNY) just announced a new diabetes breakthrough in partnership with small-cap Lexicon Pharmaceuticals Inc. (Nasdaq: LXRX). That news sent shares of Lexicon up 17% – and shares of Sanofi will surely benefit over time as its sales forces peddle this impressive new drug.
A steady supply of new compounds is one of the reasons global drug sales have risen for at least 15 straight years, from $390 billion in 2001 to more than $1 trillion today, according to Statista. And with so many baby boomers heading into old age, that figure may reach $2 trillion by the end of the next decade.
Biotech's Quiet Comeback Catalyst No. 2: M&A
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top technology 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.
Michael is 100% independent and receives absolutely no compensation from companies he writes about. His ideas are completely his own.
So, it probably goes without saying that you won't ever be left in the dark about breaking innovations, ahead-of-their-time technologies, and breakout companies on the cusp of changing the world once you join this world.