When an entire sector - or the broad market as a whole - decides
to take a dip, that's when I like to go on a buying spree and as
investors of the biotech/small pharma sector well know, it's been a
rough few weeks. The shorts have jumped on board and taken control
after the previous run-up gave many biotech stocks a liftoff
earlier this year.
There's no doubt that it's tough to sit there and look at your
portfolio during the pullbacks, as the stocks that you've been
accumulating for the long term will lose much of the unrealized
profit value - or dip into overall negative territory; sometimes
pretty significantly into negative territory.
It's at times like this where the longer-term investor needs to gut
it out, ignore the red (or less green) in the portfolio and add
shares to those positions that have not dropped as a result of bad
news, but have dropped along with a sector or market pullback.
Truth be told, we need pullbacks like this one because it gives us
a chance to buy in for prices that allow the small investor to
average down, reduce the overall risk a little and make it easier
to bank some profits during the next run.
Additionally, the reason why we sell stocks on the way up is not
only to go on vacation or eat out a whole lot more, but to make
sure that there is cash on hand in the event of a pullback. Those
that were all-in during the market crash over the past couple of
years missed out on a big buying opportunity late last year and
early this year, but those that kept some cash on the sidelines to
throw at the market while everything was on sale made off pretty
In fact, if there is any positive to come from the most recent
economic collapse, it's that a lot of small-time investors had a
once in a lifetime opportunity to jump in low and build a stockpile
of investments that only a few years ago would have been unheard
of. Who would have thought Citi (
) or Ford (
) for a dollar; [[GE]] for about six bucks? Nordstrom (
) for under ten bucks? And on the speculative side, Sirius (
) for five cents and a slew of biotechs for a dime or two?
The point is that it's too easy to be scared away from the market
on a significant drop, and it takes fortitude to be able to buy
when others are selling - as long as you're confident in your Due
Diligence and confident that the stock is not dropping as a result
of bad news relating specifically to that stock.
): I simply couldn't resist adding to my position of BioDelivery
Sciences shares at or around the four dollar level. With Onsolis
approved and on the market (according to a PR a few weeks ago that
stated the Onsolis launch was imminent), this stock should rebound
nicely when real revenues start rolling in early next year. With
the heavyweight marketing help of Meda behind the Onsolis launch, I
think that there's a good chance that significant revenue will
start rolling in quick.
BioDelivery also has potential milestone payments coming the
company's way and a pipeline of possibilities utilizing the now
validated BEMA technology.
I'm a very patient investor, and while I'm sitting out this
pullback, I'll be adding to my position of BDSI. While I do
consider BDSI a growth stock for the long term at this point, I
also consider a short to mid term speculative play because I think
a quick double from these levels could be in order with the right
): The saga of Cel Sci continues, but I couldn't resist adding
shares at eighty seven cents on Monday as the stock continued to
slide. No news has been released to justify the recent price
action, yet with so much possible news pending over the short to
mid term, I couldn't help but add to my position of the stock near
the low of the day.
Over the years I have accumulated CVM with strictly a long term
outlook, but the lower the stock slides, it becomes a decent short
term play as well.
According to an
article released by BioMedReports
on Monday, officials at Cel Sci will release an update on the H1N1
LEAPS program "very soon", and many longs of the stock have been
'long' awaiting an update. There are impatient investors out there
who want to see the company respond to the day to day action of the
stock price, but I'm the type that doesn't believe it should issue
news unless it's 'quality' news; meaning no fluff.
Remember, earlier this year I thought that Cel Sci was issuing some
'fluff' with the early swine flu PRs, but the one
PR that indicated that the FDA
had cleared the company to conduct some initial testing is the one
that validated the 'LEAPS to potentially treat H1N1' platform, in
Additional news that should be released within the next couple of
months regarding Cel Sci is the validation of the Baltimore area
facility and the commencement of the Multikine Phase III trial.
It's tough to predict day to day price action in a stock that is
being played such as CVM, but I'm sure of one thing - the lower
this one goes, the more I will buy.
My ultimate horizon for investing in CVM is for the long term - to
see how Multikine plays out - but there's enough potential news
that could hit the wires over the short term that the impatient
investor could also be quickly satisfied.
): The recent news regarding Oncophage in Europe hit the stock
pretty hard, but the long term potential of Antigenics is still
alive, in my opinion.
The glioma trials look promising enough to date. I don't believe
that Oncophage for the treatment of kidney cancer is DOA just yet
and QS-21 is alive and well.
While I do believe that any positive news from Russia regarding the
Oncophage launch in that country (combined with news of Russian
government reimbursement) would be good for both the company and
the stock, I consider AGEN more in the 'Phase II' portion of my
portfolio - alongside Pharmacyclics (
), Peregrine (
) and Keryx Biopharmaceuticals (
I'll wait and see how low this one goes before adding more shares,
but I consider Russia news a possible short term mover, QS-21
updates a mid term mover and Oncophage a long term mover.
): I continue to look at Generex as a speculative mid to long term
play, based mostly on the potential of Oral-Lyn, but I'm set on
shares for now unless the stock dips any further. I bought at sixty
five cents and fifty five cents, so I'll probably wait and see if
we see forty five cents before buying again.
I maintain my position that I think that GNBT will move up to the
dollar mark as soon as either the sector starts to turn around or
positive Phase III data is released (interim or actual), whichever
Disclosure: VFC is long AGEN, CVM, GNBT,
Genoptix: Beats Estimates and Raises