That Genes Motif: Payback Real Soon

Genes, Genes: A TCR Motif

TCR Network, I put this on paper for a journalist writing about life-sciences companies. The reporter’s interest is the Genes, Genes motif we created three weeks ago.

 

Labs, Genomes, Trials

You probably know this — biomedicals offer some of the greatest returns for investors — at some of the greatest risks.

The life sciences companies, the small ones, are in some ways like the small metals explorers we track at TCR Network: always in need of money, talent and expertise. Also: subject to stringent regulations and usually, the worst of chance and other circumstances (such as hostile campers, lawsuit-filing neighbors).

In the area of life sciences, among the most risky for investors are the medical labs performing Phase I and II clinical trials on humans. I have lost a lot of money on companies looking for treatments for ischemic strokes, “cures” for rare diseases and relief, vaccines or just plain extra years for those afflicted with cancers. I (we) lost a son to leukemia, but I probably would be investing in the smallest of life-science engineers regardless of that loss.

I have made money, too, in these flights of hope. Some of my most outsized returns have been from life-sci cos in the past 25 years. I can name them if you wish — most folks know of our TCR reports going back to my late 1990s to 2004 MarketWatch era that examined, and took stakes in, Illumina, Cor Therapeutics, BioCryst Pharmaceuticals and others.

[Again, just so you know, also some of my biggest bone-sized failures came in life sciences.]

I believe the next two years or so will give investors opportunity in several areas that are seen as emerging — although for our purposes they already have emerged. Witness in 2016 our information from a Florida strategist to purchase Exact Sciences, a diagnostic tools developer that I owned and followed many years ago. Exact Sciences (EXAS on NASDAQ) was at $8 USD or so at the time. The theory was that its clearance on medical insurance payments for a colon cancer test using DNA samples was a positive marker.

Today, as in Tuesday February 21, 2017, Exact Sciences is rising smartly to $23 USD after the company indicated its Cologuard test boosted yearly sales to $100 million. The sales rise and the stock gains are both astronomic for the small company, which no longer is small in market value: $22 billion. Just so you know, the stock price is about 23 times those 2016 sales. [The hope is the at-home test kits and DNA technology will be be used for detection of other diseases.]

We made money on EXAS; go look and see. [One of several reports: here at TCR Excerpts]

We have another researched choice from our Florida strategist in this discussion of the new Genes, Genes motif — a construct by the way that is made possible by a company called Motif Investing in California.

inject-e1434247124675

The scientists are the experts, and they also are their own worst enemies. As investors, we just try to find the ones to support that have a one in 10 chance at success and a 1 in 20 chance of making us money.

So we come to Genes, Geneshttps://www.motifinvesting.com/motifs/genes-genes-lw9veDWE

I created this concentrated Motif Investing basket — Genes, Genes — to show our TCR Network audience: 1. how easy it is to create self-made baskets at no cost with Motif Investing; 2: to show our audience that a small basket of four or six biomedicals can expose us reasonably to a little risk and a lot of potential success; 3. to show our audience that resources investing in gold, platinum, uranium, copper, zinc and so on is not the only way to join the pioneers in high-risk high-reward investing.

In the case of this small basket of biotechs referenced in this TCR Network report — http://thomcalandra.com/fingers-in-motif-baskets/ — we are talking a very concentrated group of USA-traded companies. Motif Investing does not allow for companies whose shares trade outside the USA or I easily could have added three or four from Canada and the UK. [In point: Immunovaccine of Halifax, Canada: a lab that looks to solve or treat various cancers, and already is lining up partners such as Merck and Incyte — IMV ticker Canada and IMMVF in USA.]*

The Genes, Genes basket started three weeks ago [costs nothing to build one and $8.95 USD to trade one] offers in one colorful trade a couple of gene-editing companies, a rare disease and bioterrorism laboratory, a developer of a new class of antibiotic for oral mucositis and an ETF that makes money when the overall blue-chip stock market in the USA falls. Here it is again: https://www.motifinvesting.com/motifs/genes-genes-lw9veDWE

Each of these titles this month and last have been all over the charts — up sharply and down sharply. The gene editing companies that want to fix or replace DNA strains in order to eliminate or treat diseases are especially frenetic. That is because of a USA patent office ruling this month that favored one institute’s control over parts of the so-called CRSPR genome editing technique.

I won’t get into it all except to say there is plenty on the legal horizon with corporate and institutional tussles for the rights to license CRSPR. The two companies in the index that live or die for now on court rulings are Editas Medicine and Intellia Therapeutics. One goes up when the other goes down because of the recent ruling; in time both will rise, and fall, at the same time.

The antibiotics developer in the basket, Oragenics, is so small in investment size, we need these scientists’ microscopes for the Florida lab to register on anyone’s radar. Thus intense risk and reward for this one. Oragenics OGEN on NASDAQ comes to me and our TCR Network by way of our Florida strategist.  

BioCryst Pharmaceuticals is probably the largest of these investment wise. I have owned it and been tracking it since 2003 or 2004. Probably longer.

BCRX is a solid laboratory with molecular compounds to treat rare diseases, intensive influenza and perhaps cancer. BioCryst shares in the coming week to 10 days will live or die on Phase II clinical data from a treatment it has been developing with success and failures for hereditary angioedema. Good news in a week from now will send the shares far higher, if they already have not risen by then.

The opposite is sure to happen if BioCryst’s scientists in the southern USA have to go back to the drawing board. Fortunately, BioCryst has one of the world’s only licensed treatment for severe influenza; so it could see bulk buys of that treatment, called RAPIVAB, by national governments — indeed already has received orders for that treatment. BioCryst is seen also as a bioterrorism agent of change because of ongoing work on several fronts.

BioCryst is probably a company that Bill Gates, another agent of change in that area of bioterror and in malaria and other global maladies, either owns shares of or wants to. In my 10 or so years tracking and owning the shares, which sell on NASDAQ like these others, the stock has been as low as $1 and as high as $18 or so. It is at $6, up 12 percent or so since I created the index Genes, Genes about three weeks ago.

Finally, there is that ETF in the Genes, Genes basket — https://www.motifinvesting.com/motifs/genes-genes-lw9veDWE — that is a multiplier on stock market disaster. The S&P 500 Index falls and this UltraShort SPXU rises threefold. Vice-versa, too. That is there to remind folks that investing in life-sciences companies this small is akin to riding a bicycle along the rim of a cliff during an earthquake. Right now, and for the past two years, I personally have seen the SPXU, and another one, SQQQ UltraShort on NASDAQ 100 Stocks, shred my net worth (our net worth) by 5 percent or so.

That is OK. Everyone in the investing world, or let me say 90 percent of ’em, are happy when those two ETFs fall in price. These are good times for everyone in stocks, well, 90 percent of everyone in stocks.

At this point in maybe 31 years of investing, I feel more comfortable riding the ultra-bike with miners, scientists and cliff huggers than I do with the hoi-polloi. That is just me at this point in time. I stand tall on the ultra-short derivatives.

Just a final word.

Genes, Genes is designed to be concentrated, intense in its focus. It will be much more expensive in say a month than it is now.

Or it won’t and it will be a LOT cheaper. In which case I will buy some more of my little Motif. I just wish I could add one of my Canada-traded favorites to the mix. But that is not possible at the moment. Can’t have everything.

Inline image 1

Inline image 3

* My second largest stake is Immunovaccine. First largest is Ivanhoe Mines.

 

 
— Thom Calandra (None of these companies pays me — not a one.)

 

 

The Calandra Report: Subscribe for $139 yearly

–        Option 1 – pay for 1 year here

–        Option 2 – recurring payment here

Thom Calandra & TCR are researchers and investors. Research and material they offer to subscribers are meant as editorial opinion.
 
FacebookTwitterGoogle+Share