Saturday, February 13, 2016

Amgen and possible biotech bottom

So far 2016 has been very tough on biotechnology and healthcare investors, including me. I continue to think that many if not most pharmaceutical company stocks are now undervalued. This is especially true of clinical stage companies if you have an investment horizon that allows their pipelines to mature.

I wrote an article about Amgen that was published at Seeking Alpha:

Amgen Valuation Now Excludes Potential Repatha Revenues

Amgen is one of the few biotech companies that pays a dividend. Gilead does too. In times like this when the market underappreciates pharma companies, the dividend reminds us that these companies are plenty profitable and are highly likely to become considerably more valuable for those who are patient.

Since I think we could be at a bottom I am going to be buying some more biotech stocks this week.

If it is not a bottom, it is because of panicky investors thinking wrongly. The more the market goes down, the more stock I will buy. This is a much better strategy than buying more because you are excited that the market (or a sector, or a particular stock) is going up. Provided you buy companies that have greater long term than present value. That means companies that look likely to get FDA and EU approvals for drugs that are in clinical trials now.

I have seen the market overvalue drugs in pipelines. Usually that is a result of assuming a drug will get FDA approval, and instead it being a dud. Sometimes investors, often pushed by brokers, get overexcited, so that following an FDA approval the drug cannot possibly generate enough revenue to justify the price prior to approval.

Watch out for that type of thing. But don't miss out on real opportunities when they present themselves. Look at each stock carefully before buying.

Remember, my writing is journalism, not investment advice.

Sunday, February 7, 2016

GlycoMimetics and other conferences this week

A lot of biotechnology companies are reporting fourth quarter 2015 results this week. A round of investor conferences kick off too.

None of that is likely to turn around the current slump in biotechnology stocks. That is going to require a change in sentiment. That will require continued revenue ramps from the commercial stage companies plus quite a number of new drug approvals from the FDA. When enough investors regain confidence we will see P/E ratios that are rational and pipelines that are also rationally valued. When that will happen is anyone's guess. I continue to accumulate biotechnology shares as I am able. Many are dirt cheap right now, but it still pays to be selective.

GlycoMimetics will make a presentation at 12:30 Pacific Time on Monday the 8th. If you want to prep for it you can read my article published at Seeking Alpha on Saturday:

GlycoMimetics: A Novel Therapeutic Approach With Possible High Returns

other stocks I own or cover that are reporting this week:

Tuesday: Regeneron, Seattle Genetics

Wednesday: Mylan

Thursday: Incyte, Alnylam

I post my notes on quarter results conferences. You can see my list with links to the notes here: OpenIcon Analyst Conference Notes