I've spent the last few months building up a long term buy and hold portfolio, and as part of the diversification process I wanted to make sure I included at least one biotech stock. I'm also quite tolerant to risk and from a qualitative perspective, I think Biotech has huge potential to be the next big boom, but with growth that could exceed that of the I.T industry. I suspect cell-based therapies will prove to be the first major step in this boom, and I think people will be very surprised at what we start to see within the industry as a whole over the next 10 years. Stem cell, CAR T-cell immunotherapies - these are just the beginning of the revolution to come. We've already seen just how much this industry has changed over the last 4 years. I think the next 10 will be spectacular in many respects.
Compared to a lot of other companies in the same sphere, I believe that MSB's upper management have demonstrated that they know what they are doing, in terms of getting their products through the clinical trial pipeline. From a commercialisation standpoint, this is fantastic, given that the vast majority of companies usually end up in the dreaded Valley of Death at this point, never to emerge. The fact that MSB has several late-stage product candidates, covering a wide variety of clinical applications, gives them a competitive advantage and mitigates the intrinsic risk of the entire enterprise. The expansion into the US markets at this stage was a brilliant move, and the speed at which MSB was able to capitalise on COVID-19 was impressive.
I'm still learning how to do effective fundamental analysis on speculative biotech stocks, but from a quantitative perspective, I found some of MSB's ratios (such as their operating margins, and short and long term debt management) to be more compelling in comparison to some of the other stem-cell based companies on the ASX, such as OCC, RGS, and CYP. Overall, based on the research I've done so far, out of all of them, MSB has the best chance at success. It also helps the MSB has the significantly larger market cap when compared to those competitors. Overall, it seems MSB is just further ahead than CYP, OCC and the rest.
So far I'm very impressed with MSB's performance, and the evidence is so far in favour of this trend continuing.
That's just my 2 cents, and I'm still very new to all this. At some point I could maybe do a proper analysis breakdown, but I suspect I might be preaching to the choir haha.
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