It is extremely rare for a small biotech to take a drug past a...

It is extremely rare for a small biotech to take a drug past a phase 2 trial. The reason being the cost of the phase 3 trial is normally well out of their league.

So the whole reason for a company like CHM existing, is drug discovery. That is, bring the science from an idea on a page, through testing in rats, through human safety trial (phase 1) through proving it can work (efficacy can be seen in phase 1, but phase 2 gives a better read out). Big pharma then, if interested, buy out the company or license the drud, and complete all the trials necessary for registration.

Now google CarT drug developement. Its incredibly high efficacy rates (above 97%) has meant the FDA has given fast track in the past. So drug development, if efficacy is off the clock, could happen really quickly.

The way to make money out of a small biotechn IMO, is to take a large position early on, and the wait. The ability to wait bit, and not get bored and sell out early, normally determines who makes lots of money and who makes the pips.

Investment in a biotech normally means many years of boredom, with a flurry of a few months where things go boom. There are lots of examples of this on the ASX at the moment. The long waits, mean that this type of investment isnt for everyone. But as mentioned above, CarT, becasue of the nature of the way it works, does seem to give indication early on.

Look at the people running the company. Look at their track records. Not many companies around with that kind of pedigree.