It’s been 11 years since we launched GeoInvesting, but the biotech industry has had a solid presence since 1975. Publicly traded biotechs have been prominent for decades, as has the allure of capturing high returns by finding the next Amgen Inc. (NASDAQ:AMGN) or Intuitive Surgical, Inc. (NASDAQ:ISRG).
Biopharmaceuticals are still a rapidly emerging sector, creating opportunity and risk across the microcap and small cap space – especially among companies valued less than $2 billion. For example, Amarin Corporation (NASDAQ:AMRN) just saw its shares increase nearly 700% in just a couple weeks after it released surprisingly positive data from its five year long REDUCE-IT trial for its drug Vascepa.
These moves are not uncommon across the biotech universe and related market sectors, like medical device companies. Noting this, we recently stepped up our efforts to find recurring revenue medical device companies to invest in and share with our GeoInvesting community. To go further down this path and complement our already existing work on the outskirts of the industry, we believe now is the time to turn to experts to take us on a deeper dive.
Therefore, we are proud to introduce you to a duo of biotech experts with a proven analysis service called ‘SanaCurrents’ that they, and their institutional clients, have used for the past two years to gain clarity on investing in the biotech space.
SanaCurrents is now making its service available to retail investors, exclusively through GeoInvesting.
This move goes hand in hand with our long-term goal of complimenting our premium research platform beyond our in-house team to give current and prospective GeoInvesting members further options to receive quality, deep dive research in areas we may not be fully covering.
No doubt, investing in biotech is a risky business. Many stories sound great at face value to the average investor but fail to deliver in the end. As such, having an edge is vastly important.
The founder of SanaCurrents, Bill Langbein, describes how over the last several years, SanaCurrents developed a set of objective data points related to clinical testing and the value proposition of drugs and devices in development. SanaCurrents applies these data points to forecast how likely a company will be able to advance a drug or device prior to pivotal announcements, such as clinical study results or an FDA decision. The team identifies and alerts its members to what they believe are underpriced stocks prior to a key event that may yield high returns. Since October of 2016, positive outcomes resulted in 16 favorable sentiments expressed by SanaCurrents on 19 biotech stocks.
In the second quarter of 2018, three biopharmaceutical companies disclosed clinical study results following SanaCurrents forecasts that were issued 21 to 60 days prior to their data announcements. Following the phase II announcements, the three stocks increased 77%, 79% and 88%, respectively.
The new promise of the sector lies in a recent surge of scientific innovation, the integration of technology (such as artificial intelligence with science) and a more accommodating FDA environment.
Bill explained that this year, the FDA already has approved 46 novel drugs, matching the total approved in 2017. He surmises that another 12 drugs may likely be approved this year, setting a new record and pushing biopharmaceutical values higher. The FDA and Congress also are committed to introducing more competition to respond to the well-publicized price increases of the past two years. FDA commissioner Scott Gottlieb told Congress in July that his agency was not going to wait a decade for new biosimilar drugs to enter the market, acknowledging the sector needs more price competition.
In addition, Bill said that approximately 55 biopharmaceutical companies have priced IPOs this year, putting the industry on pace to match the record levels of 2014 and 2016. The valuations of these small cap and microcap companies tend to fluctuate wildly, largely because most have no revenue and are valued by potential and news flow.
Bill has a long-standing resume in the world of biotech. We met him at the LD Micro conference and immediately realized that SanaCurrents would benefit biotech-focused investors.
We recently spoke with him during a podcast to introduce the service and pick Bill’s brain.
Before starting SanaCurrents, Bill Langbein spent more than 20 years as a life science business journalist, with stops at Reuters Health, In Vivo and California Medicine. During that time, he wrote on genomic discoveries, the emergence of biologics, and the dawn of precision medicine, through which drug developers came to recognize a one-drug-for-all approach would no longer work.
Phil Greyling joined SanaCurrents while he was a graduate student and helped develop the company’s analytics model before becoming a partner. He previously earned an undergraduate degree in molecular biology. While biologists typically start their careers with a limited business and investment background, Philip Greyling completed a professional science master’s (PSM) program, which provided advanced training in innovative scientific techniques while also developing complementary business skills in management and analytics.
GeoInvesting has had a penchant for picking high quality microcap stocks for nearly a decade based on fundamental analysis and information arbitrage. We’re proud of our expertise in microcaps and recognize it is the direct result of three decades of success by our co-founder, Maj Soueidan, for nearly 30 years in the microcap space. And we are now excited for SanaCurrents to compliment our research tool set.