{"id":720,"date":"2020-03-20T13:31:22","date_gmt":"2020-03-20T13:31:22","guid":{"rendered":"https:\/\/biohackbase.com\/index.php\/2020\/03\/20\/biotechnology-valuation-investing\/"},"modified":"2020-03-20T13:31:22","modified_gmt":"2020-03-20T13:31:22","slug":"biotechnology-valuation-investing","status":"publish","type":"post","link":"https:\/\/biohackbase.com\/index.php\/2020\/03\/20\/biotechnology-valuation-investing\/","title":{"rendered":"BIOTECHNOLOGY VALUATION & INVESTING"},"content":{"rendered":"


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\nThe selection of biotech stocks for investment is more difficult compared with the selection of other stocks and industries that possess historical data, since biotechnology is a recently new science. In the first edition of this book, we described the crucial parameters for the valuation of an early stage biotech company without a drug in the market. In this edition, we analyze novel financial models that can value stocks of biotech companies with products in the market or products under development (in pre-clinical and clinical studies). All of these parameters should be helpful to potential new investors when creating a stock portfolio that includes highly promising biotech companies. Our strategy of selecting highly promising stocks based on all parameters described in this book and of performing a basic financial modeling analysis with DFC and\/or real options valuation models has proven very successful, as this strategy provides returns higher than 100% in most cases. In the first edition of this book, based on our strategy, we suggested that Juno Therapeutics and Kite Pharma were \u201chot\u201d stocks. At that time, Kite\u2019s stock was $50.19, while Juno\u2019s stock was $54.21. Since then, Kite\u2019s stock reached $179.79, with the company acquired by Gilead for $11.9 billion, while Juno\u2019s stock reached $86.96, with the company acquired by Celgene for $9 billion. Furthermore, Moderna Therapeutics, a private company that we valued at $5.5 billion in 2016 based on our real options financial model, today has a $7.5 billion valuation. This newly revised and expanded version was written to help investors in the selection of biotech stocks based on different scientific and financial criteria.
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