The steeply declining markets of the past year have produced many undervalued stocks that perceptive investors can take potentially highly rewarding positions in. Among the more attractive opportunities are the low-priced stocks of biotech companies with sound technology and bright clinical prospects.
Avoiding single product risk is an important consideration in selecting investments in small biotech companies that are not yet profitable. In other words, stay away from companies whose future is dependent upon the success of a single product that is still in clinical trials. While big breakthroughs are possible for single-product companies, there are also many failures along the way; in these tough economic times, there will be little sympathy given by the financial world to product failures. It is far better to choose companies with strong technology that can be applied to multiple opportunities.
An interesting company that appears to be dramatically undervalued is iBioPharma, Inc. This company came into existence near the beginning of the financial market meltdown as a spin-off from an older parent company. This company is not well known, so, coupled with the overall drop in the stock market, this could be an interesting value proposition for perceptive investors. The Company trades under the symbol IBPM and has proprietary technology applicable to a number of different vaccines. Among the possibilities are pandemic swine flu, anthrax and human papilloma virus vaccines. Substantial funding has already been committed by the U.S. government and by the Bill & Melinda Gates Foundation.
Another company to consider is GenVec, Inc. This company has created technology for gene-based therapeutic drugs to treat a number of diseases, including age-related macular degeneration, cancer, and certain infectious diseases. The company’s stock trades under the symbol GNVC, and it’s most advanced product is in a pivotal clinical trial for the treatment of advanced pancreatic cancer. Despite significant technical progress, general market forces have driven the company’s stock price down substantially over the past nine months.
For the bold investors, this may be a good time to pick up rare bargains. With a little research and a little luck, investment returns on well-chosen, low-priced biotech stocks could be a good personal antidote to the ailing economy. This article’s author does not own stock in either of the companies discussed herein. This information is for educational purposes only and is not a recommendation to buy or sell any specific securities.