"Biotech, Alive and Well" - Josh Levine, MicroCap Investor
Stocks Mentioned; Antares Pharma (ATRS), Curis (CRIS) and Spectrum Pharmaceuticals (SPPI)
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Visit: Josh Levine, MicroCap Investor
New York, NY - October 17, 2012 (www.investorideas.com newswire) www.InvestorIdeas.com, a global investor research portal, specializing in sector research for independent investors, issues biotech investment commentary from MicroCap Investor analyst Josh Levine.
Excerpt from this week’s column at http://www.levinesmicrocapinvestor.com
The MicroCap Investor portfolio is heavily weighted on life science companies for reasons I've repeatedly discussed in updates. Subscribers have seen small companies like Antares Pharma (ATRS), Curis (CRIS) and Spectrum Pharmaceuticals (SPPI) emerge over the years from relative obscurity to become great successes, rewarding investors with multi-bagger profits -- with more ahead.
Most recently we also saw Neuralstem (CUR) shares nearly quadruple over a few weeks, spurred on by news about very positive results in its ALS Phase I safety trial. Although our other biotechs have displayed far less action, they are progressing solidly and continue to reach important milestones that will set the stage for bigger moves in the future.
Beyond fundamentals for these companies, market trends are also looking up for emerging and small life sciences companies.
Therapeutics companies that have gone public since 2011 are up 27% as of the end of August, outperforming the average 8.6% return for US IPOs during that time and beating the Nasdaq Composite (up 15.6%) for the same period, according to The Burrill Report. These IPO performances may be surprising given the challenges of the biotech sector to complete offerings, says Burrill, but therapeutics IPOs have been bolstered by a handful of strong performers developing, among other things, drugs for cancer and the central nervous system.
The venture capital world is also heating up over biotech investments. Several venture firms globally have each raised or are raising funds this year in the $200 million to $400 million range dedicated to life sciences, biotech and medicine.
In addition to several big acquisitions and new US regulations that could accelerate FDA approvals in certain areas, major investors are reacting to big pharma, who are increasingly investing alongside traditional VCs. Big drug companies are reallocating capital from their own in-house R&D and investing it into small innovative firms with highly-focused pipelines.
Our three big winners in biotech - ATRS, CRIS, and SPPI - have each attracted at least one major pharma partner and the relationships proved to be transforming and catalyzing for value. The biggest challenge for our other biotech companies is to advance their pipelines beyond the earlier stages to the threshold where big pharmas see the risk-reward as worth making the investment.
The good news is that these game changers in the life sciences are on track to realize this important goal. As aggressive growth investors, the time to get positioned is ahead of this phase when the risks and potential rewards may be a bit more extreme, but the valuations too compelling to ignore.
About Josh Levine http://www.levinesmicrocapinvestor.com
Levine has 25 years of senior-level experience in analyzing technology trends and investing in top-performing micro- and small-cap stocks. He excels at assessing management teams and evaluating new innovations and their impact on corporate valuations.
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