Who can forget Radient's business deals with a
dead Indian prime minister
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
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
Silenor sleeping pill
injectable acetaminophen Ofirmev
Human Genome Sciences'
lupus drug Benlysta
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
(SPPI - Get Report)
and its cancer drug Fusilev.