The financial market swoon of 2008 and 2009 has produced many undervalued stocks for aggressive investors to take positions in. Some of the more attractive opportunities exist in the price-depressed stocks of biotechnology companies with promising technologies and clinical prospects.
In selecting potential biotech investments among companies that are not yet profitable, and if stock prices are low, an important consideration is to avoid single product risk. With other words, stay away from companies whose future is dependent on the success of one product that is still in clinical trials. While the big breakthrough is possible for single product firms are also many failures along the way, and in these tough economic times, there will be little sympathy, as the financial world to product defects. Instead of relying on a single product for a home run, it is preferable to choose companies with strong technologies that can be used for multiple commercial opportunities.
An interesting company that appears to be dramatically underestimated is iBioPharma, Inc. separated from an elderly parent with no desire to continue biotechnology research, this company was formed at the beginning of the current global financial meltdown. This company is not known, so together with the overall decline in the stock market, this could be an interesting value proposition for insightful investors. The company operates under the symbol IBPM and has its own technology applicable to a variety of vaccines. Among the possibilities are pandemic swine flu, anthrax and human papilloma virus vaccines. Significant research funds provided by the U.S. Government and the Bill & Melinda Gates Foundation.
Another company to consider is GenVec, Inc. This company has developed technology for gene-based therapeutic products applicable to a range of diseases including cancer, age macular degeneration and certain infectious diseases. Trading under the symbol GNVC, its most advanced product is for advanced pancreatic cancer therapy and is in pivotal clinical trials. The company has made significant technical progress, but its stock price has been driven down over the last nine months of general market forces.
For bold investors, this may be a good time to pick up rare offer. With sound research and good timing, an investor could get valuable protection against lousy economy from investment in carefully selected small biotechnology companies. Note that the author of this article does not hold a position in stocks mentioned. This information is for educational purposes and is not a recommendation to buy or sell specific securities.
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