Value Investing Veritas Research: Sell Rating on Canadian Banks |
| Veritas Research: Sell Rating on Canadian Banks Posted: 30 Mar 2019 06:29 PM PDT |
| Posted: 30 Mar 2019 01:39 PM PDT I recently made an investment in Alector(ALEC) several weeks back at $15.99 a share. Like many biotech startups they have no revenue, only the potential which is based on if the drug can get approved and actually works. This company in particular has several drugs in the pipeline that is for Alzheimer's. The reasons for this investment were as follows: -Super CEO/founder= He has almost 400 patents and has a track record of building companies and selling them to big pharma($500 million deal with Pfizer for a previous company he founded) -Pretty lucrative partnership with Abbvie. Where they negotiated that Abbvie pays them out $205 million dollars upfront now for a license deal. Once the drugs are ready for commercialization they can either take a royalty or split 50/50 the costs to make and market the drug. There's also milestone payments as well that add up to $900 million. Is a company like this pretty common in the biotech industry? I rarely find biotech startups that already have a licensing deal/partnership lined up before they finish their drug phase testing. Let alone one where big pharma is willing to pay out $205 million dollars upfront when the drug is not approved and is several years away from commercialization. To sort of backup my claim, I managed to find this company called BeiGene(BGNE) and they received a licensing deal with Celgene where Celgene pays them out $263 million upfront and then a royalty license deal with milestone payments. That deal went public July 5 2017 and the stock went from approximately $44 dollars a share to a peak of $220 about 11 months after. The stock settled to around $130 a share today. [link] [comments]  |
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