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A Basket Of Biotechs

Mar. 10, 2020 12:12 PM ETCytoDyn Inc. (CYDY), GNBTQ, GNPX, SRNEQINO, MRNA, VRTX80 Comments
Thomas Barnard profile picture
Thomas Barnard
912 Followers

Summary

  • Presenting commentary on 4 biotechs: CytoDyn, Generex, Genprex, and Sorrento.
  • All four companies are working on treatments or vaccines for cancer.
  • Three of them are working on coronavirus (Covid-19).
  • Diabetes figures prominently for two of them.

It is an exciting time in biotech. It seems like the big challenges are within reach. Cancer, diabetes, infectious diseases. Not everything, not right away. There are still a lot of bald men, for example. And unfortunately, Alzheimer’s seems intractable. But for investors that can mean very significant gains. The big money is in the small and medium biotech's that develop the new drugs and therapies, and get bought out. For Big Pharma, it is kind of a headache, because they have to try and figure out which ones will be the winners. Ideally, they would wait and see how the trials work out, but there are risks with waiting, some other Big Pharma company might come along and swallow up the apple of your eye. Sure you may fund and have a deal for one use of a particular compound, but it might turn out that there are other uses. And while a buyer for that company might have to honor a deal for that one use, it will have the rights for it in possibly many other uses.

Not so long ago Vertex (VRTX) decided on the basis of a single trial in two pigs to buy Semma Therapeutics for $950 million. Some thought it was a risky buy. Not a single human trial in sight. I think it was a risky buy, but Semma thinks they have a cure for diabetes, and that’s a coveted goal. Semma counted Medtronic and Novartis among its angels, so no doubt there was also some competitive threat. Vertex didn’t feel it could wait, and threw the dice.

Of the four companies discussed here, CytoDyn, Generex, Genprex, and Sorrento, I spoke with CEO’s of three and two of them were typical CEO’s – cheerleaders of the first water. Joe Moscato of Generex (GNBT) comes out of marketing and he is very optimistic

This article was written by

Thomas Barnard profile picture
912 Followers
Every investment has a trajectory. There is no such thing as static. Investments grow in size until they become really enormous at which point they can only grow along with GDP. To a certain extent picking investments is a little like duck hunting, you want to pick investments which will coincide with the growth trends. You want (1) great products and/or services, (2) great management, (3) sufficient finances if the company is in development, (4) great connections whether those are sales partners or financial partners. Jeff Hawkins, in his book On Intelligence, suggests that the brain is principally a forward-looking instrument. So, this duck hunting is a natural activity of the best investors. Thomas Barnard, as a writer, was mentored and published by Nobel Laureate, Saul Bellow.

Analyst’s Disclosure: I am/we are long CYDY GNBT SRNE.

I interviewed Nader Pourhassan of Cytodyn, Joseph Moscato of Generex, and Rodney Varner of Genprex for this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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