We've waited long enough for the next biotech boom... and it's finally here.
But be warned, when these stocks start moving, there's no stopping the run, which makes buying the undervalued, beaten down, and cheap biotech stocks crucial.
"The high price [GlaxoSmithKline] it is paying for such early-stage research underlines the current hunger among large pharmaceutical companies for promising biotech assets," mentioned Reuters after GlaxoSmithKline bought Sirtris Pharmaceuticals (SIRT.O) for $720 million in cash.
In another deal announced just five days ago, Glaxo inked a $600 million collaboration agreement with Regulus Therapeutics, bringing it to the forefront of RNA technology.
Folks, the biotech boom of 2008 is upon us... The run is about to begin. Hop on board now.
The Biotech Boom Potential
As a group, biotech stocks have staged extraordinary runs since 1993. And if you were in the right names at the right times, you would have done even better.
Look at the explosiveness of the group.
- In 1995, the Index traded at $75. Three years later, it was up 160% to $195.
- From 1998 to 2000, the Index ran 700% from $100 to $800.
- In 2000 alone, after pulling back, it ran 100% from January to mid-year.
- It ran another 63% in 2001 from $300 to about $850.
- And, after another pullback, the Index jetted 183% higher from $300 to more than $850.
Here's another one. Take a look at the NASDAQ Biotech Index.
There's no denying the explosiveness of those rallies... and we strongly believe the next one is upon us as we speak.
As we said above, once these stocks start moving, there's no stopping the run. The BTK and NBI chart is proof of that.
Of course, after explosive, outrageous runs, we've seen our share of busts, too, with biotechs losing up to 50% of their value. But there's no denying the run potential.
On March 6, 2000, the NASDAQ Biotech Index traded just above 1,600. Today, it trades about 50% lower at 803.46.
But the time has come for the next explosive leg up.
What's to like about biotech these days? Buyout potential, as we just saw with Sirtris, under-valuations, and early uptrends, which we're beginning to see.
It's Why Anavex Remains a Buy
Anavex is developing the next generation of biotech drugs based on platforms based on sigma receptors.
And it'll be huge.
There's already massive amounts of literature that supports sigma receptors as a potential way to treat... and in some cases prevent... of a whole range of diseases, including Alzheimer and epilepsy to breast and lung cancer.
In other words, we could be looking at a silver bullet in biotechnology. It's like watching the work done on stem cells 10 to 15 years ago.
What I want you to understand is that Anavex, while small at the moment, is emerging as a major player within this field of research.
In a press release last month, Anavex reported...
"...that ANAVEX 7-1037 has demonstrated its ability to significantly delay the growth of cancerous tumors in patient-derived xenografts during advanced pre-clinical studies. It reduced tumor growth by 69% with minimal side effects."
These results put Anavex on the map.
In fact, Dr. Vamvakides and Anavex are starting to attract institutional money managers... and the company will be presenting at some of the most important biotechnology conferences in the world.
And a 300% run is not out of the question.
In fact, take a look at what a company, almost identical to Anavex, did.
A biotech called Medivation that's been pushing an Alzheimer drug and is now in Phase III trials, ran from $5 to more than $24 after getting its drug through pre-clinical trials and into Phase III.
At one point last year, Medivation's market cap ballooned to $1 billion... and it didn't even have a drug on the market.
That's the same potential behind Anavex. And with plans to have its own Alzheimer drug - Anavex 1-41 - in Phase I within the next 6 months, explosive growth potential isn't a pipe dream, it's a reality.
When AV-1-41 goes into Phase I trials, Hicks expects the market to re-rate the company upwards to $10 to $12 a share.
We've waited long enough since the last big biotech boom. The time to buy back in is now... that is, if you're interested in a potential 300% runner.
Ian L. Cooper