A Biotech Lottery Ticket

Another Biotech With A Catalyst Coming Up

Last month, we bought a lottery ticket on a tiny biotech, based on a post by a scientist-investor whose work I follow.

That one didn’t work out: the catalyst there was an FDA decision, following which the stock ended up plummeting over 80%, which caused our options trade to expire worthless on Friday. As I noted in a comment there, that sort of thing happens with early stage biotechs, and guy who came up with the idea seemed sharp, so I planned to give him another shot. I’m doing that now.

The New Drug Candidate

To summarize a very technical post: patients with aggressive forms of multiple myeloma often need to have their entire immune system nuked with aggressive chemo. Of course, they’ll need an immune system afterwards, and the way they get one back is via transplantation of their own stem cells that were harvested before the chemotherapy. They need a lot of stem cells harvested though, and that’s often difficult process. 92.5% of patients who received this company’s drug candidate were able to get the required amount of stem cells harvested within two days, versus 26.2% without it.

The Catalyst

The catalyst is a PDUFA (Prescription Drug User Fee Act) decision scheduled for early next month. Initially, I was going to wait until a couple of days before to place a bullish options trade on this, but given the price dynamics with this one, it makes sense to do so now.

The Company and The Trade

Read the rest here. 

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