Investing in the Biotech Sector: Five Biotech Stocks for Your Watch List
by Marc Lichtenfeld, Investment U Senior Analyst
Wednesday, November 11, 2009: Issue #1135
Investing in the biotech sector can be risky – no doubt about that.
But you know what? There are a lot of ways to make money from biotech stocks, too. If you know what to look for, that is.
Two obvious examples include:
- Picking the company behind the next breakthrough drug for cancer or Alzheimer’s.
- Digging out companies that are likely takeover targets (something my colleague Louis Basenese does expertly in his Takeover Trader service), or landing lucrative drug partnership deals, which send the stocks higher.
But there’s another excellent way that shorter-term investors can profit from the biotech sector…
Follow the Biotech Sector Conference Buzz
Throughout the year, the biotech sector holds many key conferences where biotech companies make important presentations. If you keep your ear to the ground, you can adopt a proven investment strategy: profiting from the news before it breaks.
Now, there’s obviously no guarantee that the stocks in question will rise, or even that the data they present will be positive. But very often, their stocks rise in the days or weeks before these conferences, in anticipation of good news.
Here are a few important conferences to keep an eye on – and some companies that could enjoy some positive press from them…
Five Biotech Stocks for Your Watch List
On November 15, the AACR-NCI-EORTC Molecular Targets and Cancer Therapeutics conference (surely a leading candidate for the Wordiest Conference Of the Year Award) starts in Boston.
A few companies that will present include:
- Immunogen (Nasdaq: IMGN): The company presents on November 16 and 17 and will include data on its cancer drug that treats solid tumors.
- SuperGen (Nasdaq: SUPG): It will be a busy few days for the company’s executives, as they’re set to make seven presentations on November 16-18, including one on a drug that increases tumor cells’ sensitivity to chemotherapy.
- Poniard Pharmaceuticals (Nasdaq: PARD): It will make two presentations on November 17, releasing new data for its chemotherapy drug, picoplaptin.
This conference isn’t one of the more major ones, but keep an eye on all of these companies, as it’s always important when new clinical trial data is announced. Watch how their respective stocks behave in the days before, during and after the conference presentations.
You’ll also want to mark your calendar for the American Society of Hematology (ASH) Annual Meeting and Exposition from December 5-8. This conference addresses various cancers of the blood and among the presenters will be biotech heavyweight, Celgene (Nasdaq: CELG), plus Ariad Pharmaceuticals (Nasdaq: ARIA).
The JP Morgan (NYSE: JPM) Healthcare Conference from January 11-14, 2010 is the largest investor conference of the year in the healthcare sector.
The week is jam-packed with healthcare companies revealing their stories and updates to the very top institutional investors. It’s become an increasingly difficult conference to get into, with even some of JP Morgan’s customers unable to get an invitation.
Not me, though! I’ll be there, reporting on all the breaking news and sitting down for one-on-one meetings with the CEOs of companies that I’m interested in. Stay tuned for my reports in January.
Investing in the Biotech Sector Today
And when it comes to investing in biotech, without a doubt, the most important conference of the year is the annual meeting of the American Society of Clinical Oncologists (ASCO).
This one is a way off, taking place from June 4-8, 2010. Almost all of the major biotech companies working on cancer treatments present at ASCO, with many revealing new data for the first time. Biotech stocks often make a move higher prior to ASCO.
Here’s the thing, though: The ASCO conference unofficially marks the end of the biotech “season,” which begins with the JP Morgan conference and ends with ASCO. Traditionally, biotech stocks do better over the first half of the year, with the final push higher leading into ASCO.
So if you subscribe to the “sell in May and go away” theory (which says you should own stocks from November through May), the biotech conference calendar actually fits in very nicely.
Even if you’re a longer-term investor, rather than a shorter-term trader, it’s important to understand the forces that may be at work when you’re looking at a stock. Knowing when these conferences are – and the potential impact on prices they have – can help you make better decisions when it comes to timing your purchases or sales.
Hoping your longs go up and your shorts go down,
Marc Lichtenfeld
Related Investment U Articles:
- The “Biotech Super Bowl” Starts Tomorrow… Are You Ready?
- The American Biotech Revolution: How to Invest in The Biotechnology Sector
- Two Major Biotech Trends In 2012
- Takeaways from the JP Morgan Healthcare Conference
- Why This Major FDA Approval Could Pave the Way for These Five Biotechs
6 Responses to “Investing in the Biotech Sector: Five Biotech Stocks for Your Watch List”
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Marc is a senior analyst at Investment U. His investment career started out at the trading desk of Carlin Equities in San Francisco, CA, where he executed dozens of trades each day for his clients.
Can you name or sre their any Biotech ETFs?
Thank you.
Reply
RP,
As of June this year, there were 6 Biotech ETFs, each with their own strengths and weaknesses. They are:
iShares Nasdaq Biotechnology Trust (Nasdaq: IBB)
HOLDRS Biotech ETF (NYSE: BBH)
SPDR S&P Biotech (NYSE: XBI)
First Trust Amex Biotechnology Trust (NYSE: FBT)
PowerShares Dynamic Biotech & Genome Portfolio (NYSE: PBE)
PowerShares Global Biotech Portfolio (Nasdaq: PBTQ)
Thank you,
Investment U
Reply
where did you get the info on poniard presenting on the 17th of nov? its not on their website
Reply
Obi,
Here is the info on Poniard presenting on the 17th of November.
Thank you,
Investment U
Reply
Mike — Love your reports. Our firm, Mentor Capital (MNTR) has taken its first and a very large position in Quantum Immunologics, which is still private. We track Quantum’s value because of our buy. Quantum does Dendritic Immunotherapy for breast cancer with the OFA protein found on 500 cancers. This is just like Dendreon for Prostate cancer with the PAP protein, except 2 to 10 times as large an opportunity. We invested because we feelo it is the next great breakthrough you were referring to. Best in good health — CB/MNTR
Reply
hello,
thanks for the info and recommendations.
a quick question: have you heard of a company named ‘accuray’ and the cancer fighting system they have developed called ‘cyberknife’?
would you put your money into this company?
many thanks,
noel h.
Reply