Opportunity in Biotech today?

[investmd]

Stock prices of biotech companies have taken a hit with Trump, anti vaccine sentiment and RFK's policy. Anyone else seeing a unique opportunity especially in companies using synthetic biology techniques to be the Big Pharma of the future - ie companies like MRNA and CRSP? The latter had $1.9B in cash at end of 2024 has therapy approved for one disease and pipeline for multiple diseases. Both have late stage trials currently underway. I don't think MRNA was ever intended to be a vaccine company for infective respiratory diseases - Covid was an inflection point that proved out the platform viablitliy - think they were always interested in cancer treatment. 

 

Anyone else seeing opportunity in these names? I know @Gregmal was interested in CRSP a long time ago and feels the trade has played out. 

[Rainier]

REGN and NVO are two obvious ones I am watching closely. I don’t think there’s any big secret about those two. 
 

Also LQDA has pulled back and may look like a no brainer in a couple of years.
 

I just don’t have enough insight in this area to really make a high conviction investments, outside of really established big names with a stellar track record of successful trials and marketing. Basically just either buying when companies are unfairly beaten down (like NVO seems to be right now) or betting on companies with excellent track records with a good stable of drugs (even if they don’t have a home run that they are currently milking).

 

I held CRSP for a long time several years ago because the technology is so cool. But the valuation never moved much and eventually I moved on. 

[sleepydragon]

I sold puts on SWTX. The implied vol is so high that that the stock will need to fall a lot , and it has already fallen a lot. The mkt price is not priced in any M&A deal now but options still think there will be.

 

i am also thinking to do the same on MRNA. Ceo bought $8m and company has fallen to cash value. Puts are expensive. 

on friday, at around 8pm, the metro train killed someone who transpassed near Greenwich CT (if u dont know, Greenwich has 10 billionaires, is where folks like ray dalio, steve Cohen, drunkenmiller  lives). I don’t know if it’s accident but i suspect it could be suicide.

 

Literally blood on the street.

 

[no_free_lunch]

Just now, investmd said:

Stock prices of biotech companies have taken a hit with Trump, anti vaccine sentiment and RFK's policy. Anyone else seeing a unique opportunity especially in companies using synthetic biology techniques to be the Big Pharma of the future - ie companies like MRNA and CRSP? The latter had $1.9B in cash at end of 2024 has therapy approved for one disease and pipeline for multiple diseases. Both have late stage trials currently underway. I don't think MRNA was ever intended to be a vaccine company for infective respiratory diseases - Covid was an inflection point that proved out the platform viablitliy - think they were always interested in cancer treatment. 

 

Anyone else seeing opportunity in these names? I know @Gregmal was interested in CRSP a long time ago and feels the trade has played out. 

I have a tiny position in $CRSP, more for tracking, but at current prices may make it a small position.  Down 90% and as you say it trades near value of investments.  This thing is not pricing anything in and to be fair it will probably just burn cash but any good news could send the stock up.   To be honest I view it more as angel investing than value investing, I dont really expect to get my capital back and am more just trying to help out.  Will size accordingly.

[pricingpower]

$RGNX is an interesting one at recent values, gene therapy seems pretty inevitable for at least some uses although maybe it's not this generation of companies that figures it out.  Eye focused gene therapies are simpler in some ways (stays segregated from rest of body, lower dosing to manufacture, runaway immune issues maybe less likely etc).  A large portion of biotech is deep in net net valuations territory, particularly the smaller ones that are not in any indices.

[investmd]

On 4/6/2025 at 6:38 AM, sleepydragon said:

I sold puts on SWTX. The implied vol is so high that that the stock will need to fall a lot , and it has already fallen a lot. The mkt price is not priced in any M&A deal now but options still think there will be.

 

i am also thinking to do the same on MRNA. Ceo bought $8m and company has fallen to cash value. Puts are expensive. 

on friday, at around 8pm, the metro train killed someone who transpassed near Greenwich CT (if u dont know, Greenwich has 10 billionaires, is where folks like ray dalio, steve Cohen, drunkenmiller  lives). I don’t know if it’s accident but i suspect it could be suicide.

 

Literally blood on the street.

 

Following on theme of "blood on the streets" the following biotech companies are all down approximately 50% ytd : 

from smallest market cap to largest: Crisper (CRSP), Vaxcyte (PCVX), Moderna (MRNA), BionTech (BNTX) -"only" down 30% ytd, Novo Nordisk (NVO)

 

Are they all down simply because of Trump related politics on vaccine hesitancy rather than structural issues with the companies?  Crisper, Moderna, BionTech have almost same amount of cash on balance sheet as market cap. What am I missing? 

[pricingpower]

The Readout Loud by Stat is a nice industry podcast.  There was a Stifel industry outlook posted in another thread somewhat recently.

 

Even going into this year the new effectively price controls on top drugs potentially making new research uneconomic was already an issue.

 

Then the cost, timeline and uncertainty around drug approvals looks scarier as a meaningful chunk of the FDA brainpower behind doing approvals was just fired with some pretty anti-science rumblings from the new folks in charge.  The tariffs situation getting steadily scarier as pharma is something the US exports so easily targeted by retaliatory tariffs along with chaos in supply chains for a while (drug components are mostly made in China/India).  

[no_free_lunch]

Just now, investmd said:

Following on theme of "blood on the streets" the following biotech companies are all down approximately 50% ytd : 

from smallest market cap to largest: Crisper (CRSP), Vaxcyte (PCVX), Moderna (MRNA), BionTech (BNTX) -"only" down 30% ytd, Novo Nordisk (NVO)

 

Are they all down simply because of Trump related politics on vaccine hesitancy rather than structural issues with the companies?  Crisper, Moderna, BionTech have almost same amount of cash on balance sheet as market cap. What am I missing? 

 

I believe that it relates to a corrupt industry.  Look at something like the approval of the drug for alzheimers, totally indefensible.  Beyond that, just guessing but perhaps there just has not been a lot of success stories, at least in the areas I follow.  Meanwhile you have 20 year patents, its not that long, and then the drugs are patent free.  I am not a huge fan of the industry, you have to be very careful.  I am only following due to the huge down movement and that they trade for near book.

[sleepydragon]

2 hours ago, investmd said:

Following on theme of "blood on the streets" the following biotech companies are all down approximately 50% ytd : 

from smallest market cap to largest: Crisper (CRSP), Vaxcyte (PCVX), Moderna (MRNA), BionTech (BNTX) -"only" down 30% ytd, Novo Nordisk (NVO)

 

Are they all down simply because of Trump related politics on vaccine hesitancy rather than structural issues with the companies?  Crisper, Moderna, BionTech have almost same amount of cash on balance sheet as market cap. What am I missing? 

the ipos market is shutdown, so it will be hard for biotech firms to raise money. It also means the prospect of being bought by bigger firms is dead. No m&a..

[investmd]

@sleepydragonIPOs are cyclical - in and out of vogue - ok. These companies are already public so don't need to "ipo" - some have cash to potentially acquire other biotechs that are having hard time going public. Although I don't see the need for acquisition for these companies to grow in value, I don't see why the IPO market prevents Eli Lilly from acquiring one of the names listed...

[sleepydragon]

40 minutes ago, investmd said:

@sleepydragonIPOs are cyclical - in and out of vogue - ok. These companies are already public so don't need to "ipo" - some have cash to potentially acquire other biotechs that are having hard time going public. Although I don't see the need for acquisition for these companies to grow in value, I don't see why the IPO market prevents Eli Lilly from acquiring one of the names listed...

what i meant was the recently failed/delayed IPOs are signaling it would be impossible for many biotechs to issue more shares to raise capitals. It’s tough for companies that burn cash. Therefore, biotech as a group are being sold. 

[rogermunibond]

Biopharma processing TMO, DHR, and RGEN

[no_free_lunch]

Just now, rogermunibond said:

Biopharma processing TMO, DHR, and RGEN

This makes a lor of sense and is probably what the smart money should do. 

[investmd]

Healthcare stocks that I'm dipping into. None have positive EBITDA and not "high quality" - all (except TDOC) have interesting novel technology that is based on transformational science with potential to be category defining companies in the future whose stock has been beaten down: 

 

Therapeutics using mRNA tech and gene editing tech: BNTX, MRNA & CRSP - all trading at close to save level as cash on hand

 

Diagnostics: Grail, Natera & Exact Sciences are interesting

 

Services: TDOC - only global telehealth service, >90M annual visitors, integrated within health systems as opposed to just being outside of health system - probably no rush to buy. 

[tnathan]

I've been buying NVO and IQV. Surprised to not have seen IQV mentioned at all it's trading at trough multiples historically in a weak market ... they should be making more money at higher multiple in a few years assuming world doesnt end

[pricingpower]

This substack post by Adu Subramanian is the best primer I've seen for bottom up biotech investing particularly for the non-specialist in the chatGPT era

 

https://adus.substack.com/p/some-tacit-knowledge-in-biotech