Biotech Stocks: How To Triple Your Money In A Single Stock!

| February 27, 2012 | 0 Comments

I spent most of this past weekend at my home away from home… one of the Phoenix area’s many softball fields.

You see, my 10-year old daughter is playing her first season of club softball.  And every other weekend, our family, along with hundreds of others, camp out at the ball field to watch our kids play.

This weekend the team was playing in yet another local tournament.  But it turned out to be one of the more exciting ones for my family.

In her first at bat in the very first game, my daughter cranked a fastball into deep centerfield.  The poor little outfielder had to chase the ball all the way to the fence.

And before she could get the ball back into the infield, my daughter was standing on third for a stand-up triple!  (I think she could have scored a homerun, but the third-base coach held her up to avoid a close play at the plate.)

My daughter made it look really easy…

But let me tell you, playing at this level is anything but easy.  Like anything in life, it takes hours of practice and hard work to do something really well.

And the same goes for investing.

You’re not going to hit too many triples in the stock market unless you spend some time doing your homework.

You have to follow the market on a regular basis.  And you have to do hours of tedious research to uncover the hidden gems.

Here’s a perfect example…

Back in June of last year, I was researching biotechnology stocks to find a trade for subscribers of my Biotech Supertrader service.  I do this research on a regular basis as I usually recommend two biotech stocks every month.

I saw on the FDA calendar that Threshold Pharmaceuticals (THLD) was expected to release important clinical trial results in the first quarter of 2012.  The company was conducting a phase 2 clinical trial of their novel anti-cancer drug, TH-302, in patients with pancreatic cancer.

Now, I knew from prior research that good trial results for any anti-cancer drug usually means big gains for the biotech’s share price.

Cancer is a disease area that garners a huge chunk of the total dollars spent annually on healthcare.  Last year alone, patients spent a whopping $22 billion on cancer treatments.

So, I dug a little deeper into the research behind TH-302…

I discovered that TH-302 is a guided missile that zeroes in on cancerous tumors while avoiding healthy cells.  The drug targets levels of hypoxia (low-oxygen concentration) common in tumors but rarely found in normal tissues.  In other words, TH-302 attacks cancerous cells and avoids damaging healthy cells.

I further discovered that TH-302 had performed well in early clinical testing.  Patients treated with TH-302 saw big increases in both progression free survival and median overall survival compared to patients treated with an older chemotherapy.

Armed with this knowledge, I recommended THLD to my subscribers on June 22, 2011.  At the time, the stock was trading for just $1.63 per share.

As it turns out, my diligent research paid off in spades!

In early February, Threshold shocked the world with a major announcement.  Merck KGaA agreed to pay Threshold up to $525 million in milestone payments for the opportunity to co-develop and co-market TH-302.  At the time, Threshold was worth just over $63 million.

As you might imagine, the stock soared on the news!

It shot up 216% over the next two days.

With the shares spiking, I told my subscribers to sell half their shares and pocket profits of 147%!

But that was just the beginning…

A couple of weeks later, Threshold released results from the phase 2 trial.  The results showed patients taking TH-302 in combination with an older chemotherapy saw a 63% increase in progression free survival.

As you can see, the stock roared 88% higher in a single day.  It even traded up to a four-year high of $6.65 per share.

A few days later, I recommended selling the remaining half of our shares for gains of 278%!

All in all, my subscribers more than tripled their money in just eight months’ time.

No question about it, biotechnology stocks are one of the few areas of the market that offer huge profit potential over short periods of time.  But you can’t just buy any old biotech and hope to rake in the dough.

You really have to do your homework to find out which ones have the best chance of ultimately gaining FDA approval.  And this research is not easy.

Biotech companies are engaged in highly complicated scientific research. And the clinical trial process is an unforgiving gauntlet that leaves most drug candidates on the trash heap.

If you’d like to grab your share of the huge potential profits in biotech stocks, I invite you to take a subscription to the Biotech Supertrader.  You can learn all about it here.

Plus, if you act now, you can get your subscription up and running before our next trade alert.  We’ll be recommending another high-quality biotech with huge upside potential next week!

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Category: Stocks

About the Author ()

Robert Morris is the editor of Penny Stock All-Stars, an investment advisory focused on discovering small-cap and micro-cap stocks that are destined to become the market’s next Blue Chips. The Wall Street veteran and small-cap stock specialist is also a regular contributor to Penny Stock Research. Every week, Robert shares his thoughts with our readers on a variety of penny stock-related topics. In addition to Penny Stock Research, Robert also writes frequently for two other free financial e-letters, ETF Trading Research and the Dynamic Wealth Report. He’s also the editor of two highly successful and popular investment advisories, Biotech SuperTrader and China Stock Insider.

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