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Monday, April 24, 2017

New Biotech Research Service - Bio5C

I've been a stock analyst since 1999. I've focused solely on biopharma names since 2003. I've seen a lot of success and a lot of failures. It's amazing to me how many small biopharma companies continue to make the same mistakes, over, and over again. I've researched drugs with novel mechanisms of action that look outstanding in preclinical studies, only to see them fail once they hit the clinic. I've also witnessed repurposed agents that bafflingly succeed in new indications where the market wagered little hope. I've seen good drugs fail because of bad business models and terrible management and bad drugs succeed because of good business models and brilliant management. There is no true formula for success, but there are a number of roadblocks and red flags.


Before my career as a stock analyst, I was a bench scientist. Do I know everything there is to know about science and drug development? Obviously, not; but, I do know enough to understand what I think will work, what I think may work, and what I think has a snowball's chance in hell. More importantly, after 15 years of watching biopharma stocks rise and fall, I have a pretty good sense of what the market thinks will work or fail, and speculation is what tends to be what drives biopharma stock prices. 

I also have a pretty good background in finance (MBA, CFA, etc...), although anyone can be taught to read a balance sheet. It's quite simply the easiest due diligence step for stock analysts to undertake, but one that I see far too many individual investors fail to perform.

I've also been around the block a few times. I've attended many presentations and sat in on more one-on-one meetings than I care to recall. I speak to CEO's, CFOs, CMOs, and business development executives on a regular basis. There are wiser souls - I admit I've been taken for a ride or two - but my sense of bullshit detection gets better every day and I know what sells and what does not.

My 5 C's of Biotech Investing™ will help you figure out if the science is real or pretend. It will alert you to pending catalysts and hopefully keep you away from shyster management teams. Finally, it will keep you updated on the balance sheet and the ownership because if you're thinking about buying a stock, it's important to know who is with you and who is against you!

How To Use The Model

The obvious strategy is to own the names that score well and avoid the names that score poorly. I've only been scoring companies officially now since March 2017, but I've been employing this type of analysis now for years in my research. Over the past six months, names that scored in the top 10% of my model are up an astonishing 56%, while names in the bottom 10% are down 46% (the IBB is down 3% over the name period). In this sense, my 5 C's Model can be used as an excellent starting point for discovery and due diligence. 

I intend on having between 100 and 125 names scored and updated on a regular basis. Use my 5 C's Model to generate ideas for further analysis or to find and avoid red flags! I will also post the changes in scores for each component following each update. I've said many times, fundamentals are important, but the change in fundamentals is what drives stock prices. So use the 5 C's model to keep a close eye on what names are tracking up and what names are tracking down. 

A stock that scores 15 points and heading to 18-20 points is likely to be a big winner (see Matinas Biopharma case study), whereas a stock that is 23 points right now likely has little room left of upside and may be heading for a pullback - I'm looking at you Bluebird Bio - summer 2015!.

As A Subscriber

You will get the individual 5 C's component score for each name I follow. I intend to update each name at least once a quarter, but likely more often dependent upon news and material disclosure. New names will be added on a regular basis. Each month, I will post new Notes on some of the more interesting names, as well as keep existing Notes on the names from last month up-to-date. 

The service also offers a live message board for interaction with other biopharma investors where we can discuss the best ideas (long or short) and generate and challenge each other with new ideas each month. As the proprietor of the model and senior author of all Bio5C Notes, any and all conflicts of interest, including our position, will always be disclosed to subscribers. Bio5C is 100% independent research. We do not allow sponsorship from any biopharma company. We are fully committed to providing unbias and transparent analysis for subscribers.

I'm very excited about Bio5C and I hope you will give the service a try. I do not see anyone else providing this type of scoring system for so many under-followed biopharma names. I'm hoping that my experience and my many years of honing and crafting this model will help all of us make better investments in the biopharma universe.

Please check out: www.Bio5C.com!
& Follow Bio5C on Twitter: @Bio_5c

Thank you!

2 comments:

  1. Will you discontinue posting on the Bionap website ?

    ReplyDelete
    Replies
    1. No, will definitely keep posting stuff here, but wanted a way to use my 5C to analyze more names. Please check out the service and let me know what you think!

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