We're Entering a 'Golden Age' of Biotech Investing

By Jeff Brown

Wednesday, March 17, 2021
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► There’s no going ‘back to normal’…

COVID-19 has changed our world permanently.

We can easily identify the obvious changes. There are more remote working options. Online grocery and food delivery has been quickly adopted. And going forward, industries are rethinking every major conference and public gathering.

But there are also less obvious changes taking place…

Breakthroughs in one technology sector that were five to 10 years away are now happening on a monthly or weekly basis.

Specifically, I’m referring to biotech.

We’re at the start of a multiyear bull market in biotech. The pandemic has opened the doors for radically new approaches to vaccines and therapies, many of which were not taken seriously before.

It’s going to help us cure diseases at a pace previously unseen.

And for investors, it presents a once-in-a-generation opportunity to create enormous wealth.

When we picture biotechnology, I imagine 99% of us think of scientists in white lab coats fiddling with test tubes and peering into microscopes…

But the story is far more interesting. As I like to tell readers, biotech is much more “tech” than “bio” these days.

Today, the biotechnology industry is using big data, machine learning, and artificial intelligence (“AI”) to make breakthroughs that – even just a few years ago – would have seemed impossible.

Consider just one example…

Back in March 2020, the early stage biotech firm AbCellera Biologics (ABCL) did something that many people thought was impossible.

AbCellera received a blood sample from a patient who had recovered from COVID-19. The company used AI to screen more than five million immune cells in that sample. And it identified about 500 antibodies that helped the patient fight off the virus.

AbCellera used this as a starting point to create an antibody therapy for COVID-19.

Historically, this process would have taken years to accomplish. So how long did it take AbCellera? Just 11 days. Beyond incredible.

And the industry took notice…

Pharmaceutical giant Eli Lilly (LLY) rushed to partner with AbCellera. They worked on a treatment using these antibodies.

In June of last year, AbCellera sent its COVID-19 antibody therapy to clinical trials. It was the first company to do so.

And by November, the antibody treatment, named bamlanivimab, had received emergency use authorization from the U.S. Food and Drug Administration (“FDA”). The U.S. government has already agreed to purchase 1.45 million doses.

Think about this for a minute. An early stage biotech took blood samples and identified COVID-19 antibodies. It then developed a therapy and launched clinical trials… and then received emergency use authorization. And it did all this in just eight months. Until just recently, this process would have taken several years.

Make no mistake, this is revolutionary work. And it is saving lives.

In all my years as an analyst, I’ve never seen this type of speed from the biotech industry. And it’s thanks in large part to COVID-19. The virus has lit a fire under this overlooked industry.

But investors are now starting to notice…

Suddenly, the world has woken up to the potential of biotechnology.

Every venture capitalist and private equity house has realized how powerful these technologies are and how quickly biotech can move. We’re going to see an acceleration in biotech investment, early stage companies, and initial public offerings (“IPOs”) as a result.

In fact, we’re already seeing that…

In just the first two months of this year, 42% of all traditional IPOs have been biotechnology companies. And collectively, these companies have raised over $5 billion for drug development.

The 2020s will be the decade of biotech. This will be the first decade in which biotechnology companies truly harness the power of Moore’s Law and demonstrate exponential growth.

For us as investors, we need to be paying attention.

We can think of it this way…

In early 2017, cryptocurrencies were a mostly unknown, niche asset. But then the cryptocurrency space went on an unprecedented bull run before its painful correction in 2018. Bitcoin alone rose over 2,000% in 2017.

And I believe investors’ awareness and engagement in early stage biotech companies will rival that of the crypto bull market back in those early days.

But unlike cryptocurrencies – many of which were backed by nothing – early stage biotech is supported by very real, world-changing technology. The returns we will see from quality biotech companies will create lasting, generational wealth.

We are at the very beginning of a years-long biotech bull market. Breakthroughs will continue to happen. Diseases – previously thought untreatable – will be cured. And, yes, fortunes will be made.

We are entering a golden age of biotechnology. It’s happening right now.

And I believe I’ve found the perfect way to profit from this explosion in biotechnology…

Most investors are distracted by the “big name” biotech stocks they see on CNBC. But hardly anybody is paying attention to a small, niche sector of the biotech market. Here, triple-digit gains are possible in days or even hours.

Thanks to the federal government, these stocks have a preset “timer” attached to their share prices. And once their timers hit zero, they can skyrocket.

I call these investments “timed stocks.” And due to two forces, “timed stocks” are actually accelerating.

More of these stocks are coming onto the market. The gains are larger, and they are happening more frequently.

The investment potential here is unlike anything I’ve seen.

I invite you to learn more about “timed stocks” by joining me tomorrow, at 8 p.m. Eastern time, for the free event I’ve been writing about. During this special investing seminar, I’ll reveal everything I’ve learned about these stocks… and I’ll share the details of the No. 1 Timed Stock on my list.

Click right here to reserve your spot for free.

I look forward to seeing you tomorrow night!

In the mailbag, readers react to last Thursday’s essay on the baby bust

Have you invested in the biotech sector before? If not, what are your questions or concerns about the sector? Share your thoughts in an e-mail to [email protected].

“Talking about staying employed in your late working years… I was forced to retire from my job in October 2019 because they couldn’t or wouldn’t find me another job. I was 64 and out the door after 19+ years of good, dedicated service.” – Jason H.

Berna comment: Jason, I’m sorry to hear this. I’ve heard this story too many times.

“LOVED THIS!!!!

“The authors add, in a conclusion that will surprise absolutely no one who has had to homeschool children this year…”

“Fortunately, our two sons graduated from college (both in 4 years!) in 2013 and 2017 – so we didn’t have that challenge… but we have heard plenty of horror stories…” – George R.

“Hi Berna. There is another very simple reason why birthrates are declining. It’s scary to give birth – or even go to a prenatal check-up – in the middle of a pandemic.

“Seeing freezer trucks with bodies makes you want to stay away from hospitals. When you carry a child, you feel very vulnerable. You’ll do anything to protect it – even not having it or postponing having it.

“Those who’ve had babies during the pandemic have been worried about the pregnancy and the risk of catching the virus and how that would affect the fetus. For those who gave birth, it’s also been extremely isolating and lonely. In many cases, it’s only the parents who see the baby – for months. How do I know this? Scuttlebut research.” – Beile G. (yes, a woman)

Berna comment: Beile, I agree… Being pregnant, getting prenatal care, and delivering during a pandemic all sound less than ideal. I have great empathy for the women I know who’ve done this.

I was just listening to a talk yesterday evening that mentioned how outcomes are much worse in pregnant women when they get COVID-19 – measured by hospitalizations, intubations, and deaths. In terms of the pregnancy, the risk of early labor, emergency early delivery to save the baby or mom, and stillborn birth are all increased if mom gets the virus. On a brighter note, the same session went into great detail in explaining how COVID-19 vaccines are in fact safe for pregnant women.

“Berna, Illegal immigration is the crux of the highly contentious topic of immigration into the US. If we have negative population growth excluding immigration, which will harm our economic growth, then our state department should process visa and green card applications at a higher rate.” – Roland D.

Berna comment: Roland, great point about differentiating between authorized and illegal immigration. Planned and authorized immigration has always been a growth driver for the U.S. economy.

Regards,

Jeff Brown
with Berna Barshay
March 17, 2021

Whitney Tilson
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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to more than $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor’s degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

Click here for the full bio.