But the rewards of success are enough that you should consider some biotechs for your portfolio. The group had a big speculative run but collapsed with the rest of the tech stocks during the last three months. These huge swings have always characterized the biotech stocks, and always presented trading and investment opportunities. Besides buying low, there are a few other guiding principles. You want a biotech company with several projects, and these projects should be targeting large markets.
Any potential drug can fail having several candidates improves the odds.
A research-stage company should have enough cash to last through any temporary funding drought. While you can t predict success, you can generally figure out whether a company has good science. So are research relationships with major drug companies. The stock is way down, selling at a bit more than a quarter of the high reached three months ago. The company has several promising research programs, targeting different diseases, plus other assets.