News BIOTECH VS MEDICINE: WHAT IS YOUR CHOICE?
BIOTECH VS MEDICINE: WHAT IS YOUR CHOICE?
First, let's figure out what the difference is.
The principles of investing in biotech and healthcare companies differ quite widely. They have different valuation techniques, they affect the investor's expenses and income in different ways, and they work differently in the long run. Despite this, there is a "gray" area where they interact closely with each other.
A biotech company is a high-risk startup with high profit potential. Capitalization growth in this area is very rare, but the potential income fully justifies the high probability of failure.
The medical business is more predictable and stable, so dividends from medical and pharmaceutical companies constitute a significant part of an investor's income, although they are usually lower than in the biotech industry.
Experienced investors use different methods for assessing the prospects of the medical and biotech business. In the first case, the standard indicators of joint-stock companies are assessed, namely, their total profitability, the P / E ratio (a financial indicator of the ratio of the market value of shares to the annual profit received per share), dividend yield, etc. In the second, it is important to assess the probability of success startup, potential future income and capitalization growth.
Sometimes biotech companies operate “at zero” or even at a loss for several years. The fact is that very often they invest all the earned and attracted funds into research and development. That is why such companies are constantly in need of investment and are associated with venture funds and stock markets. Investors take risks consciously, because they believe in the idea and in the fact that its implementation will bring significant profits in the future.
For example, the creation of CAR-T immunotherapy, an innovative method of treating rare types of leukemia and lymphomas, was funded by "training" a person's own immune cells to fight cancer cells. The British biopharmaceutical company Autolus Therapeutics, which develops new methods of cell therapy, has raised about $ 150 million in four years after its initial public offering (IPO) on the American stock exchange NASDAQ.
In early November, Christian Itin, Chairman and CEO of Autolus, announced that recent studies have confirmed high remission rates in patients treated with the new AUTO1 therapy (a form of CAR-T therapy). AUTO1 is designed to increase the resistance of the body's own "trained" cells in the serial targeted destruction of cancer cells. As of July 2019, 53% of the studied patients remained in remission for more than 9 months.
This direction is very relevant. For the second year now, United Financial Group has been researching and developing a safe drug for the treatment of oncology together with a team of scientists. The team includes doctors and candidates of biological and chemical sciences. In December of this year, development tests are planned in vitro - these are tests of the drug on various types of cancer cells. After this stage, the company moves on to preclinical research, shortening the time it takes to bring the drug to market. Investing in UFG at this stage will be more profitable, as the risks become less and less, and the number of stakeholders is more and more.
Therefore, if you are looking for a good startup to replenish your portfolio, we advise you to hurry up: 2/3 of the investment stages are almost over, and the number of those wishing to receive good dividends is growing!