Short Term Trading Weekend Lounge: 5 - 7th August, page-240

BIOTECH NOTES:
(I’ve probably included areas that might not strictly be biotech.)

• Perhaps because of the long timeframes involved, Biotech attracts or creates obsessives. Don’t become one! This weekend theme is dangerous because people will present a story and noobs will lock into the story and cling in hope forever. Almost all the biotechs mentioned will be failures.
• Don’t invest in spec biotechs. Just trade them.
• Once a biotech develops solid trading momentum on the back of sales or substantial deals, then invest.
• Forget cancer cures except for a quick trade - they rarely work and they take ages to get through trials and FDA.
• Forget stocks that need extensive complex trials.
• If timeframes aren’t met or the story changes, then sell. Can always get back in if things improve.
• Buy on the lead up to results, but sell before results because outcomes are often bad, leading to price collapse. Then trade the results , i.e. grab the bounce after collapse or the pullback after a rise.
• Forget bios that need to land a big collaborator. It rarely happens because the big pharma is too stodgy. Examples of failures: ADO with Philips, OBJ with GSK, UNS with many big pharma companies.
• Ideally, find something that will be a simple monopoly, disruptive, bypasses the need for big collaborator, and has a short timeframe to commercialisation, e.g. RAP.

IMO.