Playing the Long Game in Biotech

In partnership with

These daily stock trade alerts shouldn’t be free!

The stock market can be a rewarding opportunity to grow your wealth, but who has the time??

Full time jobs, kids, other commitments…with a packed schedule, nearly 150,000 people turn to Bullseye Trades to get free trade alerts sent directly to their phone.

World renowned trader, Jeff Bishop, dials in on his top trades, detailing his thoughts and game plan.

Instantly sent directly to your phone and email. Your access is just a click away!

Subscribe for Free

Random Words from our sponsor, Public.com

All right, options traders, listen up. I want to tell you a bit about Public.com. But first, have you ever actually thought about all the fees you're paying to trade options? Aside from the regulatory fees, there are commissions, and most platforms charge per contract fees, too.

That's what makes today's sponsor Public. Public doesn't charge commissions or pre contract fees, and in an industry first, they offer a rebate of up to 18 cents per option contract traded. Check it out. If you trade 1,000 option contracts on Public, you'll get up to $180 in rebates. If you trade 10,000 contracts, you could earn almost $2,000.

More importantly, the rebate means you can maximize your profits and and minimize your losses. So to recap, no commissions, no per contract fees, and up to 18 cents on every contract traded. See why NerdWallet recently awarded Public five stars for options trading, and start earning up to 18 cents per contract traded only at Public.com.

Paid for by Public Investing. Options not suitable for all investors and carry significant risk. Full disclosures and podcast description U.S. members only. 

Jeff’s Random Words

This week, a stock I own fell sharply. Moderna (MRNA) fell 12% after management gave commentary at a conference. That’s never a great feeling as a shareholder, but if I’m being honest, it really didn’t impact me. This is because Moderna can be a pretty volatile stock. Moderna has a beta of 1.67, meaning its stock is about 67% more volatile (to the upside and the downside) than the stock market.

I wouldn’t say 12% moves are common, but when they do happen, I’m usually not too fazed because I know that’s how it goes with this stock. However, this week’s news got me thinking about Moderna as an investment, and how I think about it in my portfolio.

I’ve been following this company pretty closely for a while. I don’t own many biotech stocks, but for some reason, I’ve always been interested in Moderna. Part of it is because my non-scientist brain can kind of understand how mRNA technology works, and I think it’s interesting. But also because there is a large pipeline of future vaccines and therapeutics and it seems like the odds are decent that several of them will make it to the market.

This week, the company announced it was reducing its R&D budget, lowered its sales forecast, and pushed out the date it expects to become profitable. So the market reaction makes sense. I won’t go into any further detail here, but this got me thinking about whether I should think differently about my investment.

On the positive side, the company expects to have 10 products on the market by 2027. Today, they only have their COVID and RSV (for older patients) vaccines commercially available. There are also 7 programs in phase 3 trials, 18 in phase 2, and 11 in phase 1. So the pipeline is still robust. Not all of these will make it to market, but their success rate so far has been impressive.

On the negative side, sales have lagged the company’s expectations, hence the lowered revenue guidance. Shareholders also now have to wait until 2028 for cash flow profitability.

The bottom line with Moderna is that this is a long-game kind of stock. It’s not a small company, with a market cap of $26 billion, but it’s considerably smaller than some other well-known pharmaceutical companies. For example, Pfizer (PFE), Merck (MRK), and Eli Lilly (LLY) have market caps of $166 billion, $294 billion, and $878 billion, respectively. 

Put another way, Moderna could 10x and be in the middle of the pack of pharma’s giants. This helps me remember there’s no rush to buy more of this stock. If the company ends up being massively successful, there will be plenty of buying opportunities in the future. If it ends up flailing for decades, I’ll be happy I only have a small position.

Jeff

Jason’s Random Words

It seems like a lot of my conversations with Jeff start with him saying “a stock that I own fell sharply.” He should think about buying more bonds!

Jason