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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 a 35-year Silicon Valley veteran and one of the top technology financial analysts working today. He regularly delivers winning trade recommendations to the Members of his monthly tech investing newsletter, Nova-X Report, and small-cap tech service, Radical Technology Profits. In the past two years alone, his subscribers have seen over 100 double- and triple-digit gains from his recommendations.
As a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs and high-profile industry insiders. In fact, he was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon. And 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.
In addition to being a regular guest and panelist on CNBC and Fox Business Network, Michael 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 "bailout" became a household word.
You can follow Michael's tech insight and product updates for free with his Strategic Tech Investor newsletter.