This was the annual Biotech Week in San Francisco. The big JPMorgan Healthcare Conference has attracted the Biotech Showcase and the LifeSci Advisors Corporate Access Event as venues for smaller companies. Torreya Biopharma published an excellent Biopharmaceutical Sector Market Update for the JPMorgan Conference - I've extracted some of the best charts.
Biotech had a bad 2021 and a miserable first half of 2022 – no surprise there.
The XBI has been flat for five years.
Torreya has a favorable outlook for 2023 based on declining Treasury bill rates. I agree that will happen, but probably not until the second half of the year.
I expect a big upswing in mergers and acquisitions activity this year. Big Pharma's pipelines of new drugs are depleted. We got three announcements during Biotech Week: AstraZeneca is buying CinCor Pharma for up to $1.8 billion (CinCor’s shares jumped 144%), Ipsen S.A bought Albireo Pharma (+92%), and Chiesi Farmaceutici S.p.A. is acquiring Amryt Pharma Plc for up to $1.48 billion (+107%).
This is really interesting. Our recommendations sell at big discount to the average enterprise value of companies at a similar stage of development. That substantially reduces the investment risk.
This also is really interesting, but more difficult to use. “Quality of Efficacy Data” is a subjective standard and opinions can differ widely. Example: From the first day I saw the data on TG Therapeutics' multiple sclerosis drug, I was really excited. Six years later, other people are getting excited.
Our 8-stock Biotech Moonshots portfolio is up 33.8% so far this year, but you can still buy one share of every company for a total of just over $12. I’ve moved one stock to a Hold. Let’s dig in.