It’s been a turbulent year for equity markets…
With the uncertainty around COVID-19, major U.S. indices experienced the worst crash in over a decade. The S&P 500 fell more than 33% in early spring. And even after a remarkable rally, the index is still down from its February high.
Other well-known businesses were not so lucky.
American Airlines, Carnival, and Hertz are down about 60%, 70%, and 91%, respectively, on the year. Hertz even filed for bankruptcy after more than 100 years in business.
With that sort of carnage, what I’m about to say next might sound shocking.
But the pandemic has actually accelerated certain industries. And investors in a few key stocks are making a fortune in 2020.
Here’s what I mean…
272% in Seven Months
That’s how much investors in Moderna (MRNA) have made since January. That’s right. Investors in this company have more than tripled their money in seven months. And this was during one of the worst pandemics in modern history.
How is this possible?
Well, as we likely know, Moderna is a biotechnology company focused on something called “synthetic biology.” That’s the technology that allows scientists to engineer functioning biological organisms.
For the most part, Moderna flew under the radar since the time of its initial public offering (IPO)… until the pandemic broke out. It’s using synthetic biology to create a vaccine for COVID-19.
It took the virus, sequenced it, and then designed a vaccine. It will hopefully produce immunity from COVID-19.
In a matter of days, Moderna came out as a leading candidate for a vaccine. And its stock price has more than tripled.
To see a synthetic biology company have a breakthrough like this shows why it’s one of the areas of biotech I’m most excited about over the next decade.
COVID-19 Has Changed the Game for Biotechnology
I can’t emphasize enough how transformational this pandemic will be for the biotech industry. In the last 30 years, I’ve never seen the biotech industry come together and tackle a common problem as it has with COVID-19.
That’s everything from companies that produce diagnostics equipment to confirm whether somebody has COVID-19 – or has had COVID-19 – to all sorts of therapeutic approaches… to produce either a vaccine or a therapy for it.
That’s as well as evaluating existing drugs that have been used for decades to see if they can be repurposed in the pandemic.
It’s been extraordinary. And it’s shone a light on the biotech industry.
People didn’t realize how quickly the industry could move. Especially with the more advanced biotechnologies like synthetic biology and genetic engineering. These are being used to put potential candidates together in just a matter of months.
The process of drug discovery typically takes years. This is the first time we’ve seen that this can happen in months. In some cases, candidates were developed in a matter of days using modern techniques for drug discovery.
This has completely changed the game.
Because of how much progress has been made in such a short time, I predict we’re going to see record levels of investment in biotechnology.
That’s going to create even more exciting investment opportunities for people interested in this space.
But before you “throw a dart” at any biotech stock, there are a few things investors should know…
Understanding Biotech Investing
Few individual investors are familiar with this market. So there are a few things investors should know ahead of time…
For starters, some of the most exciting companies in this space are private.
I tend to track these companies from early on… sometimes as early as their seed venture capital (VC) round.
I follow their subsequent capital raises. And I keep a close eye on when I think the most exciting companies with the most exciting therapeutic approaches are going to go public.
There is a group of high-quality VC and private equity investors I track every week. They’re always good indicators of potentially exciting companies.
And there’s one more important rule about investing in the biotech markets…
Biotech Is Catalyst-Driven
Another important thing to know about this market is that biotechnology companies move on catalysts… on news.
That can be a presentation at a medical conference on September 20, at exactly 2 p.m. Pacific Standard Time. It can be at 4:30 p.m., on the East Coast, when a company announces its earnings.
The biotech industry lives and thrives off these specific moments in time. They are related to earnings calls… or papers they’re presenting at conferences… or filings with the FDA… or clinical trial results.
I’ll give you one example.
This company is Akero Therapeutics (AKRO). I recommended this stock to my readers in January.
This was a company I had been tracking closely even before its IPO. And I knew that Akero was on the verge of releasing clinical trial results for its Phase 2a clinical trial of AKR-001 in NASH patients.
Sure enough, the trial results were positive. The stock popped in June. We held on for a few more days and ultimately locked in gains of 87%.
Here’s what some of my readers had to say about the trade…
This is the first sell alert for me. I locked in gains of $6,600 in seven months. I am pleased with this…
I own all three of your services and am up $125,000 if I sold today. Thanks for your great advice and sharing your knowledge. I am looking forward to your new venture!
– Karen N.
(Gain of +$4,322.) I’m looking forward to the next moneymaker. Thanks much for your motivation to “help the little guy.”
– Frank S.
I’m pleased to inform you that this first trade has paid for my lifetime membership! I invested $5,016 and sold for $8,066.66. Now, let’s keep the momentum going!
– Dan S.
As great as this trade was, it’s actually on the lower side for our biotech trades. Last year, my readers locked in gains of 432% in under two months with Synthorx (THOR).
The important thing to understand is that investing in the right biotechs at the right time can lead to incredible gains in a matter of days or even hours.
And there is one biotech stock that is at the top of my list. If investors only ever invest in one biotechnology company, I believe it should be this one.
Based on my analysis, I believe this company is on the verge of a major announcement, a cure for a rare genetic disease. Once that happens, the stock will soar, possibly going as high as 1,000%.
To share all the details, I’m hosting my first-ever free biotechnology master class on August 5, at 8 p.m. ET. And I’d love it if readers could attend. Simply go right here to reserve your spot.
Editor, Early Stage Trader