Chris’ note: Our mission at the Cut is to help you really move the needle on your wealth. We do that by putting market megatrends on your radar early on. This allows you to profit ahead of the crowd.
One of the most potentially profitable trends on our radar right now is the boom in early-stage biotech stocks. Our tech expert, Jeff Brown, has put together a free online presentation all about this boom… and how to maximize your profits.
Our publisher is taking down Jeff’s presentation at midnight Eastern Time tonight. So, if you haven’t already, I encourage you to check it out here. Then read on below to learn more about how the COVID-19 pandemic has put new innovations in the biotech sector into hyperdrive.
It’s been a turbulent year for stocks…
With the uncertainty around COVID-19, the S&P 500 plunged as much 34% in early spring.
And some industries got hit a lot harder.
The world’s largest airline, American Airlines (AAL), is down 60% so far this year. Cruise operator Carnival (CCL) is down 70%. And car-hire giant Hertz (HTZ) is down 91%.
American Airlines and Carnival are still solvent. But after more than 100 years in business, Hertz was forced to file for Chapter 11 bankruptcy protection in May.
With that sort of carnage, what I’m about to say may sound shocking…
But the pandemic has actually accelerated profits in certain industries.
And investors in a few key stocks are making a fortune in 2020.
Here’s what I mean…
That’s how much shareholders in biotech company Moderna (MRNA) have made since January.
During one of the worst pandemics in modern history.
Take a look…
Moderna is based in Cambridge, Massachusetts. It focuses on “synthetic biology.”
That’s the technology that allows scientists to reengineer organisms by changing their genetic code. For example, reengineered organisms might produce a substance that can be used as a medicine.
For the most part, Moderna flew under the radar since its initial public offering (IPO) on December 7, 2018.
Then the pandemic hit. And Moderna turned to using synthetic biology to address COVID-19.
In February, it took the virus, sequenced it, and then designed a vaccine. It will hopefully produce immunity from the disease.
Within weeks, Moderna came out as a leading candidate for a vaccine. And its stock price has more than quadrupled since.
It’s just one of many reasons I’m so excited about the profit potential in biotech over the next decade.
I can’t emphasize strongly enough how transformational this pandemic will be for the biotech industry.
In the last 30 years, I’ve never seen the biotech industry come together and tackle a common problem as it has with COVID-19.
The industry is coming up with everything from new diagnostic tools… to novel therapies that fight the disease… to vaccine candidates.
It’s also evaluating existing drugs that have been used for decades to see if they can be repurposed for the pandemic.
The pace of innovation is dizzying.
It used to take years for biotech companies to put together new drug candidates. Today, by harnessing advances in bleeding-edge technologies such as synthetic biology and gene editing, this process is now taking months… even days.
Consider just one example – an early stage biotech firm out of Vancouver, Canada, called AbCellera.
In March, it did something many people had thought was impossible.
It took blood samples from patients who had recovered from COVID-19. It used artificial intelligence (AI) to screen more than 5 million immune cells in the samples. And it identified about 500 antibodies that helped the patients fight off the virus.
These antibodies could be the key to treating COVID-19.
And AbCellera used this as a starting point to create an antibody therapy that could potentially cure the disease.
Historically, this process would have taken years to accomplish. It took AbCellera 11 days.
By harnessing advances in machine learning – a form of AI that excels at pattern recognition – AbCellera and other bleeding-edge biotech companies are accelerating the process of drug discovery.
This compresses the time and money it takes to bring a therapeutic target from an idea to FDA (U.S. Food and Drug Administration) approval.
I expect we’ll see record levels of investment in biotech as a result of this acceleration of innovation.
That’s going to create even more opportunities for investors.
But few investors are familiar with this market. So before you “throw a dart” at any biotech stock, there are a few things you should know…
For starters, some of the most exciting companies in this space are private.
I tend to track these companies from early on… sometimes as early as their seed venture capital rounds.
I follow their subsequent capital raises. And I keep a close eye on when I think the most exciting companies with the most exciting therapeutic approaches will go public.
There is a group of high-quality venture capital (VC) and private equity investors I track every week. They’re always good indicators of potentially exciting companies.
And there’s one more important rule about investing in the biotech markets…
Biotech stocks move on catalysts… on news.
That can be a presentation at a medical conference on September 20 at exactly 2 p.m. Pacific Standard Time. It can be at 4:30 p.m. on the East Coast when a company announces its earnings.
The biotech industry lives and thrives off these specific moments in time. They are related to earnings calls… or papers researchers are presenting at conferences… or filings with the FDA… or clinical trial results.
I’ll give you another example.
I recommended the company Akero Therapeutics (AKRO) to my Early Stage Trader readers in January.
This was a company I had been tracking closely even before its IPO. And I knew that Akero was on the verge of releasing clinical trial results for its Phase 2a clinical trial of AKR-001 in NASH patients. [NASH stands for nonalcoholic steatohepatitis, the most severe form of nonalcoholic fatty liver disease.]
Sure enough, the trial results were positive. The stock popped in June. We held on for a few more days and ultimately locked in gains of 87%.
Here’s what some of my readers had to say about the trade…
This is the first sell alert for me. I locked in gains of $6,600 in seven months. I am pleased with this…
I own all three of your paid services and am up $125,000 if I sold today. Thanks for your great advice and sharing your knowledge. I am looking forward to your future ventures!
– Karen N.
(Gain of $4,322.) I’m looking forward to the next moneymaker. Thanks much for your motivation to “help the little guy.”
– Frank S.
I’m pleased to inform you that this first trade has paid for my lifetime membership! I invested $5,016.00 and sold for $8,066.66. Now, let’s keep the momentum going!
– Dan S.
As great as this trade was, it’s on the lower side for our biotech wins. Last year, my readers locked in gains of 432% in under two months with cancer-fighting firm Synthorx (THOR).
Even better… investing in the right biotechs at the right time can lead to triple-digit gains in a matter of days… or even hours.
That’s because there are specific days and times associated with these catalysts. And they can shoot share prices higher.
For this reason, I call these early stage biotech stocks “timed stocks.” And I’ve made it my mission to introduce as many investors as I can to their moneymaking potential.
It’s why I hosted a free online presentation all about them last week. My publisher will take it down tonight, at midnight ET.
So if you’re interested in learning more about my method for picking “timed stocks” and the returns they can deliver, I encourage you to see the full presentation for yourself right here.
In the years ahead, diseases previously thought untreatable will be cured. More biotech companies will go public.
And fortunes will be made.
Editor, Early Stage Trader