I had three picks for 2016, Relypsa $RLYP, Acadia $ACAD and Progenics $PGNX. $RLYP was acquired at a 60% premium by a large Swiss company. ACAD got its drug approved, and just hit another successful trial for pimavanserin. PGNX has done very well. Oral Relistor got approved, and it has a nice long pipeline, and its only problem has got nothing to do with itself, but with its choice of a partner. Despite all that, the stock is up almost 100% this year. If you had invested 100k in these three stocks around the time I picked them, you would have made an 80-100% profit by now. So that’s good.
There were other picks that have done well. $ARWR, $PTLA, $CCXI and $SGYP come to mind. Even Halozyme, a pick from November, has done very well in the last couple months However, to keep the record straight, there have been failures - although not from my top picks list, but still, failures. Cempra is one; although, funnily, it did make the ad comm, but it failed to get approved and is a lost cause. So has DVAX; but the stock that has surprised me the most is Gilead. How can a $150bn company lose a third of its value in one year, just by doing nothing and sitting like a lame duck?
So it’s a mixed bag, and the lesson to be learned is, when it comes to speculative stocks, to buy low and take profit at every 5% rise. Let’s make that a rule for 2017 and beyond. If it is a speculative stock - ie, no approved drugs, no proper revenue stream, drugs in phase 2 or 3 trial, about to declare results, go before the tribunal at the FDA etc etc - if it is such a catalyst-driven, high risk stock, take profit at every small opportunity. I can’t underscore this idea strongly enough.
Another issue I face with some members is that we need to buy these stocks at the proper time. I can recall at least two stocks which did very well in the last 18 months. One went up 28x since I recommended it, another went up 2x. However, I know of at least one subscriber who went into these stocks at near-peak levels, and failed to make the profit they should have made. Now, I often simply recommend a stock, but do not give an entry point unless it is the Level 4 membership. So, you need to go on finviz and see which stocks among my recommendations are trading near their 52-week lows. Buy those stocks; for the rest, wait for a dip. If you buy a good stock at a high price, what’s the use?
On a personal note, I haven’t been able to devote as much time as I wished to this work because frankly, having lost our sole marketing platform, I am facing difficulty marketing the service properly, so there’s not a lot of financial incentive to spend the amount of time I would like to spend. So, if you find the work useful, do me two favors, one, upgrade to at least the Level 3 membership in 2017, and two, tell some friends. Those would be nice gestures, and would help me allot more personal time as well as more resources to the job. With your support, there’s a lot more I could do to help with your biotech investments.
Now, for this year’s picks, I will go with one each from the three main categories - the big pharma dividend payers, the emerging ones, that is, companies with at least one approved drug and a proper revenue stream, and the speculative ones, those that are still in clinical stages. It is good to have a proper allocation of funds; a fixed percentage of dividend payers, emerging and speculative ones. I am ignoring large cap growth stocks this time because, first, I did a detailed review of some of them earlier this year, and two, 2016 has made even these solid stocks look like speculative stocks. So, let’s pay safe with big pharma and go for established dividend payers.