This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Biotech Stock Mailbag: 2011 Report Card

Who can forget Radient's business deals with a dead Indian prime minister or pseudo-partnership with the Mayo Clinic? Then there was Radient's massive loan default, the reluctant disclosure that its India joint venture was a bust and the delisting from Amex.

I use the Mailbag to teach investors how best to vet biotech and drug stocks, and most importantly, how to avoid losing money in the scams, frauds or stories too good to be true. Penny stocks like Radient look cheap and therefore less risky to many investors, but as Radient proved all too well in 2011, these stocks are more often money-losing black holes. Your investing dollars go in, but they never come out.

As for Chucky who wrote me back in April to crow, "Looks like you got Radient wrong you [Bleep.] [Bleep] you [Bleep.]"

Not so much, Chuck.

It doesn't happen often enough but the Mailbag can sometimes discover promising, under-the-radar biotech and drug stocks. Case in point: Amarin, which was highlighted in May 2010 when the stock was trading for around $2.50 per share.

My Amarin coverage continued into 2011, highlighting the company's takeout potential following the release of strong phase III data for the lipid-lowering drug AMR101. Unfortunately, even I, the biotech skeptic, can become blinded to the downside risks as I did in August when I too blithely dismissed the early warning signs of a big Amarin sell off fueled by concerns about AMR101's patent problems.

If Hep C was the biggest biotech investment story of 2011, shorting new drug launches was the biotech-trading story of the year -- and a successful strategy, to boot. It seems so cruel and counter-intuitive, but in 2011, getting a new drug approved was often the worst thing that could happen to a biotech stock.

The Mailbag in 2011 spent a lot of time discussing and warning investors about the perils of new drug launches, from Somaxon Pharma's (SOMX) Silenor sleeping pill and Avanir Pharma's (AVNR) Nuedexta to Cadence Pharma's (CADX) injectable acetaminophen Ofirmev and Human Genome Sciences' (HGSI) lupus drug Benlysta.

This Mailbag from May was overstuffed with some of the craziest, mouth-breathing hate emails I received all year. Stuff like this almost always marks the top of a speculative biotech bubble market.

The same Mailbag, by the way, demonstrated how wrong I was this year with Spectrum Pharmaceuticals (SPPI - Get Report) and its cancer drug Fusilev.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AMRN $1.99 0.51%
AVNR $16.96 0.00%
OREX $2.39 -1.65%
SPPI $5.48 0.00%
VRTX $133.13 0.64%


Chart of I:DJI
DOW 17,812.19 +19.51 0.11%
S&P 500 2,089.14 +2.55 0.12%
NASDAQ 5,102.8080 +0.33 0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs