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In Biotech We Trust

Given the recovery of biotech stocks over last few weeks, investors can almost say "In Biotech We Trust". Monday started with big biotech buyout with Roche buying Intermune (ITMN) for $8.5 Billion. This is a deal for company which has less than $150M yearly revenue. But hey, when did those things matter when you have a promising billion $ drug waiting for FDA approval which could come as early as Nov 2014. One could have easily made some dough by buying ITMN stock when rumors started about 2 weeks back that some European drug giants are interested in this company. Luckily I have been studying, tracking and investing in this company since mid-30s.
This deal gave a major boost to other bio-techs which could be next buyout candidates. Here are some of my predictions for either buyout or positive response from FDA. Since these stocks are extremely volatile, I won't recommend them to anyone AT ALL since one could lose all their investments.

The reason I am even writing this blog on bio-techs is only because of my personal interest/study and putting out potential winners publicly. It is like testing my own bio-tech stock picking skills. The price mentioned is possible entry point when markets cool down

  • ACHN - below $8
  • ARWR - below $10
  • FOLD - below $6
  • ISIS - below $30
  • JAZZ - below $140
  • ICPT - below $220
  • CLVS - below $37
  • INSM - below $13
  • SRPT - below $20
  • RNA - below $8
  • TKMR - below $15
  • CLDX - below $12
Personally I feel that there are more than 50% chance that many of these companies would be successful in clinical trials and could be bought over (JAZZ may be due to tax inversion theme). There are some big stocks like GILD, REGN etc which also would do very well (20% gain). After all they are charging more than year's salary (in Bay area) per patient for some of their drugs ($84000 for Sovaldi - $1000 per pill)
Americans like their tech - whether it's high-tech or bio-tech or green-tech. And hence they are willing to fund these companies. That's why America is leader in all of these fields.
Have a great weekend!
/Shyam

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