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Buying This Biotech Is Like Purchasing a Lottery Ticket

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The biotech has been left for dead, but there remains potential for a revival. Exelixis is still testing Cometriq in liver cancer and kidney cancer. A pivotal trial in the latter is scheduled to read out this year. The drug certainly has some activity, given the approval in thyroid cancer and improved progression-free survival in prostate cancer, but it's hard to know the likelihood of success in liver and kidney cancer, given the lack of overall survival in prostate cancer.

While buying Exelixis is kind of like buying a lottery ticket, taking a long shot can be a financially good decision. In Cheryl's example, if the prize to hit all the numbers in the New York lottery is more than $22 million, the financial odds are technically in your favor even if it's a long shot -- assuming you don't have to split the prize with other winners.

Exelixis could be the same kind of situation on a smaller scale. It's not hard to see the stock price getting back to where it was before the negative prostate-cancer data was released if the drug helps kidney cancer patients. Just remember: As with lottery tickets, you shouldn't invest your life savings (or anywhere near it) in biotechs.

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The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that could revolutionize not just how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. If you hope to outsmart Wall Street and realize multi-bagger returns you will need to get in early -- check out The Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW .

The article Buying This Biotech Is Like Purchasing a Lottery Ticket originally appeared on Fool.com.

Brian Orelli has no position in any stocks mentioned. Cheryl Swanson has no position in any stocks mentioned. Leo Sun owns shares of Pfizer. The Motley Fool recommends Exelixis and Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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