Biohacking Biotechs

Originally posted by pigofsteel ↑

The landscape has changed a lot in Biotech Investing, atm inflection points and milestones along the road to success don't matter much anymore...

But it really jas changed for the better here on the ASX, because this gives us an opportunity to make some serious money , becUse the valuations are so far out of kilter..

There are a few companies out there that have spent years heading towards commercial success and creating value that we can buy for 5 cents or less in the dollar...

Two basic requirements they must have is Great Science and Good management...

So us investors can hack into this success cheaply and ride the wave home...

I have listed a few possible companies to look at , they are all very close to success, all have interesting technology, some have good management, some have new Management that could possible turn around what should be good companies..

AVH and CZD are two companies that fall into the new management category.. I like the new team at AVH, and dom't know enough about CZD management..

Keen to hear others thoughts..

And SSH on the Nasdaq ex ASX:SHC

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It is sad that inflection points and milestones do not attract massive interest. Heck I remember a few years ago that a biotech company would announce a basic patent was granted in a foreign jurisdiction and the market cap would double. Admittedly that was at the very lower end of the scale, absolute microcaps.

I mentioned on other posts that the sector needs a big winner or two to ignite interest again. A biotech lifecycle imo is not dis-similar to that of a mining explorer. Trials and approvals along the way are a bit like drilling and proving up a resource that may ultimately not be economic/commercial. Risk money will move away from speccy mining stocks and need a home.

I've taken these points from ausbiotech's website which show reasons for investing in biotech and I agree with each:

Investment leverage – exciting potential for significant above-average returns;
Attractive valuations – relative to the potential top-line and bottom-line growth;
Maturing sector profile – more Australian and Asian companies getting closer to commercialisation age;
Sector rotation – risk capital seeking returns outside of resources;
M & A activity – large pharmaceutical companies are looking to add to their drying pipelines. The average acquisition premium was 66% (with 47% median) based on the last 82 transactions compiled by Citigroup;
Qualified talent is being drawn to the biotechnology industry;
Demographic drivers – ageing population in the Western world is providing increased momentum and investor flows; and
Regulatory pathway improving – the time required to get approval is reducing. A recent example is the ‘Breakthrough’ therapies pathway created by the FDA Safety and Innovation Act.

Immugene released a good presentation today, worth a look. Shows how undervalued they possibly are compared to overseas peers. I don't hold Immugene, but I follow as immugene are one of the companies (alongside Oncosil which you mentioned) which was set up recently by Forrest Capital.

Back to your first point, Pigofsteel, I think investors are worried about losing 80-90% of their capital overnight, which happens and has happened recently. The key IMO is to take a portfolio approach with biotech - rather than try and pick a single winner, spread capital over a small portflio of biotechs. Some won't make it, some will just flounder, whilst one may make it and it is this single stock that will more than make up for any of the others failing. Unless they are all bad!