September 26, 2013

The Life Sciences Report:

John McCamant Scans Under the Radar for Promising Biotechs

by : Peter Byrne

The Life Sciences Report: The medical biotech sector has generally been going great guns in 2013. Is there a seasonal aspect to the overall performance of biotech stocks? Are some seasons preferable to other seasons from an investment point of view?

John McCamant: Historically, January has been a good month, as many small- to mid-cap biotech stocks that were sold for tax losses before year-end can have significant price moves in the New Year. This is commonly referred to as “the January Effect.” The American Society of Clinical Oncology’s annual meeting—the world’s largest cancer meeting, held in May—can also be a strong time of year for biotech stock movement, as more than 50% of drug candidates in development are targeted toward treating cancer or the side effects of cancer treatment.

While there are some seasonal aspects to biotech investing, the primary drivers of good performance remain good news flow and a positive overall market environment for this sector of growth stocks. On the negative side, summer has historically been tough for biotech investors. This past summer is a good example of this trend not holding true. The biotech indices were up nicely, based on a good overall market and a slew of individual companies, like Isis Pharmaceuticals Inc. (ISIS:NASDAQ), delivering value-creating data.

TLSR: What biotech fundamentals do you use to decide whether to invest in a startup?  …read more