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To hear Wall Street tell it, AbbVie Inc. (NYSE: ABBV) drove right into a ditch last month.
Here's the thing. The company announced results of a Phase 2 trial on March 22 that were disappointing but hardly fatal. The results mean AbbVie won't seek fast-track approval for its promising antibody-drug conjugate, Rova-T, but it still expects to be able to take it to market in the near future.
Wall Street overreacted – no surprise there – and AbbVie shares lost 15% in three sessions.
Here's the thing. Wall Street's overreaction to AbbVie's disappointing U.S. Food and Drug Administration trial results weren't the only reason for its share-price plummet.
You see, though it shouldn't be, biotech is in the dog house – and investors are primed to punish stocks in the sector for just about anything.
In fact, since hitting a three-year high in August 2015, the Nasdaq Biotech Index is off 6%. During that stretch, the S&P 500 is up nearly 35%.
Biotech is down for three main reasons. Wall Street is worried about…
- High and rising drug prices…
- The impact of a possible trade war on foreign sales…
- And expiring patents for some older medications.
But what you don't hear much about is the fact that the industry is about to bust out.
That's because biopharma companies are ready to release several potential blockbuster drugs – drugs with potential yearly sales of $1 billion – over the next few months.
I've identified three specific Biotech Blockbusters that could do even better than that. So, I'll show you those.
And then I'll reveal the single best way to play all three all at once…
Pulled Back from the Cliff
Over the last several years, I've read a number of Wall Street reports about the so-called biotech patent cliff. Simply stated, a drug falls off that "cliff" when its patent runs out and it starts facing competition from generics.
And a number of successful drugs out there are rapidly approaching their patent cliffs.
That sounds bad.
But there are good things happening in biotech as well.
In fact, I was thrilled to see a recent report from Clarivant Analytics, a research firm that works closely with industry leaders and top universities, which says a total of 12 compounds being released in 2018 could become blockbusters.
So, I went through the data and found three potential "Biotech Blockbusters" that I think could lead the pack.
Let's take a look…
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.