Short primer on biotech stock analysis
Biotech investing has a reputation for being exciting — and brutal. The upside is obvious: one big drug approval can send a stock up 50–100% in a single day. But the path there is littered with failure. Roughly 90% of drugs that enter clinical testing never make it to market. It’s a capital-intensive, high-burn business where you’re essentially trying to find the one out of ten that survives.
If you want to play this game well, you can’t just love the science. You also have to understand the business model and the incentives around each drug launch.
