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Biotech Is The New Game PDF Print E-mail
Written by TechnicalBuy   
Tuesday, 10 July 2012 00:00

I haven't been updating the website regularly because I had set a strategy in place in September of 2011 and so far everything has been unfolding as planned. For those of you that have followed my writing you know that I love the biotech sector and specifically Bioasis and iCo Therapeutics. My strategy was to play defense with the general market and only stick to my biotech picks. The strategy has definitely paid off so far and both biotechs remain on a solid path to even more success and investment reward.

I do tweet more often as I find it more convenient on the go. If you do follow my tweets you'll notice that I was lucky enough to correctly call out several runs in stock price (including the last move in ICO from $.34 to $.54).
Below is a brief update on my feelings about the market and the latest developments with the stocks I follow.


The biotech bull market is rapidly growing. For the past two years I've been carefully looking out for the signs of the biotech bull. This year the signs are coming by a truckload. Every week there is either an M&A deal or some sort of a big-news event. Here are a few interesting recent tidbits:

  • Attendance at Bloom Burton & Co.'s Toronto Health Investor Conference resembled a resource conference. At the same time the 2012 BIO International Convention was underway in Boston. The mood was one of optimism and exuberance as clearly the investors were back in the biotech. 
  • Ernst & Young's 2012 annual biotech report notes that there was a "funding explosion with biotech companies raising US$33.4 billion in 2011, second only to 2000, when the genomics bubble was at its height". Both M&A activity and R&D spending were up significantly this year.
  • Celgene offers up to $500M for promising (pre-clinical!!!) antibody to Inhibrx.
  • Roche and AC Immune sign a $418 M-plus deal for another Alzheimer's antibody. (Alzheimer's research is hot with many costly trials on the way. Great news for Bioasis' Transcend).

I could go on, but you get the picture. With the Nasdaq biotech index up 14% this year wider investor audience is certainly taking notice. Looking back to 2010, resource companies were raising capital with ease while the biotechs were in a tough spot. In speaking to some of the financiers out there it seems that the situation has completely turned. Vancouver's resource companies are going through a tough period while the biotechs are raising capital with ease.

My strategy is to stick with the biotech sector for now and stay away from the resource market during these turbulent times. That strategy has certainly paid off this year. My two biggest biotech investments: Bioasis (BTI.V) and iCo Therapeutics (ICO.V) have more than tripled and doubled in value this year, respectively. Growth potential for both remains strong. The market cap of Bioasis is $50M and iCo is $20M while their peers are getting offers valued in the $250-$500M range. Both have very critical milestones in the near future that should quickly close that gap considerably.


Last Updated on Tuesday, 10 July 2012 06:20
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