When You're Knocked off the Horse…Get Back On!
The Mantra of a Biotech Investor….UPDATE
At the request of several of you I am providing an update to my post from Oct. 2, 2016. Four months has quickly passed by and I did get back on my biotech horse and I also sent a few out to pasture. I'll give you a brief roundup of those mentioned in the last post and I have one other I've added to my team.
Dynavax Technologies, DVAX, has continued to disappoint. Back in October the stock had already been gorged by the Heplisav FDA cancellation and the bloodletting has continued the stock is off more than 50% since my last post. The class action suit is no surprise, there seems to be plenty of bad news surrounding the company. If you're a bottom fisherman then you may want to take a shot but buyer beware. There's probably easier ways to make money. Not a horse I'm riding at this point. I am still long but have sold most of my position.
Alcobra, ADHD, also has lost over 50% since the last post. Not much for me to say on this. In my view it's time for the glue factory on this one.
Threshold Pharmaceutical, THLD faired a bit better than DVAX and ADHD, by only being down a bit over 20%. Not much has changed here. They did announce a collaboration with The National Cancer Institute, not a game changer but a good thing overall. I continue to accumulate on dips.
Champions Oncology, OTCQB:CSBR has been just that since my original article….A CHAMPION! This stallion ran up from $1.64 to a close today of $4.57, that's up over 250%! I'll take it! The company turned a profitable Q2 and the market took notice. I love the science and the story but I'm trimming about 25% of my position at these levels. I don't think it can sustain the current trajectory. There is still a lot of money in the deal from several years ago and at some point they'll be taking some of the table. The stock has not had any liquidity for several years, so it would stand to reason that some of the old money takes this opportunity to exit. I am trimming, but don't be afraid to pick some up if it goes below $2.50. If more positive news comes out, I may also be a buyer.
ProtoKinetix, OTCQB:PKTX was one that I mentioned last time as well. I did begin to accumulate a couple weeks after my last writing. Last week the company was approved by Health Canada for Human Clinical Trials. PKTX is truly a unique little biotech. First of all, the current CEO, essentially, single handedly resurrected the company from the dead, mostly with his own money, I might add. The company has very little burn, which significantly reduces investment risk and the real kicker is the clinical trials about to take place our Investigator Sponsored by the University of Alberta, so the company isn't the one footing the bill for the trials. It's made a nice move from .07 to .0835 since October, but like I said about CSBR last article, it's just a matter of time until the investment community notices this one. I believe there is significant upside to be had once this stock is recognized in the mainstream. I'd be a strong buyer up to .20, then I wait on clinical trial results.
One new edition to my team has been ZIVO Biosciences OTCQB:ZIVO ZIVO is essentially an algae company. ZIVO is classified as a biotech but at first glance doesn't really look like one, but after a deeper dive, I get it. Algae has tremendous use and benefit in multiple areas. The company an association with Zoetis ZTS, which is the world's largest animal health company. Algae has multiple uses in animal nutrition and food. The advantage is it is far more healthy and of course all natural. Their algae strain can also prove very beneficial for human consumption as well. Algae is a super food, it is naturally high in protein, vitamin C and fiber. The company recently unveiled a concept protein drink that I believe could be of real interest to one of the players in the ever popular energy drink market. The stock has begun to get some notice, it has moved from .06 in October to a close of .11 today, but it is still relatively thinly traded. I think this is a low risk way to play the biotechs, there are numerous studies involved with the technology but success is not riding on the outcomes of a clinical trial.
Disclosure: I am/we are long CSBR, PKTX, ZIVO, DVAX, THLD.