Buy on the Dip? | Biotech Banter - 5/7/14 | The Motley Fool | Summary and Q&A

TL;DR

Sales concerns for Seattle Genetics, flat growth for PHAcylic, and clinical trial failure for Endocyte impacting biotech stocks.

Key Insights

• ❓ Biotech stock prices are often impacted by sales concerns, earnings reports, and clinical trial outcomes.
• ❓ Management guidance can heavily influence investor sentiment and stock prices.
• 🌍 International drug pricing and regulatory systems may impact the cost and availability of drugs, as seen in Europe.
• 😒 Immuno-oncology drugs, such as PD-1 inhibitors, offer a broad range of potential use for various cancers.
• 🥳 Evaluating the risk-reward ratio is crucial when investing in riskier biotech stocks.
• ⚾ Market value can fluctuate based on clinical trial results and approval processes.
• 🖐️ Patience and timing can play a significant role in successful biotech investments.

Transcript

hi fools welcome to biotech banter the mle Fool's biotech focused investing show I'm Healthcare analyst David Williamson and I'm joined as usual by Brian orelli our biotech expert now Brian we had a busy week last week uh there were some biotechs that that sold off right at the end of the week uh that was really led by Endo site which got cut in ha... Read More

Questions & Answers

Q: Why did Seattle Genetics' stock drop and should investors be concerned?

Seattle Genetics' stock dropped due to sales of their cancer drug, Cetrus, only increasing by 19%. However, investors should focus on the company's pipeline and potential future indications for the drug.

Q: What caused PHAcylic's rough earnings report and is it a good time to buy their stock?

PHAcylic's flat growth for their drug, Inbruvica, was a result of conservative guidance. Investors should consider whether management is sandbagging or if the drug's potential has reached its peak sales.

Q: What led to Endocyte's stock decline and is it a good investment opportunity now?

Endocyte's stock dropped due to a clinical trial failure for their lead drug in ovarian cancer. The preliminary approval they had received in the EU is now unlikely, but it's still uncertain how the company will proceed with their pipeline.

Q: Are any of these stocks a bad investment following their recent challenges?

PHAcylic has regained its losses, so it may not be considered a bad investment. Seattle Genetics has a promising platform and licensed their drug to other companies, making it an attractive choice. Endocyte's future is uncertain, but its low market value makes it potentially worth considering.

Summary & Key Takeaways

• Seattle Genetics saw a stock drop after sales of their cancer drug, Cetrus, only increased by 19%.

• PHAcylic faced a rough earnings report due to flat growth for their flagship drug, Inbruvica.

• Endocyte experienced a significant stock drop after their lead drug for ovarian cancer failed in a clinical trial.