The wife of a close friend of mine was recently diagnosed with breast cancer. Thankfully, it was successfully removed and her prognosis is good. Interestingly, because of a genetic analysis of the tumor tissue, she was spared chemotherapy—something that she would have routinely been prescribed only five years ago. That kind of genetic analysis is part of a burgeoning trend in healthcare called “personalized medicine,” lighting a fuse under the stock prices of many publically-traded companies doing business in this promising sector.
Turn $100 into as much as $517,931 in less than 5 months buying THESE penny stocks:
Peter Lynch reveals the market’s best stocks with explosive growth potential:
One small cap issue in this space that has recently garnered the attention of market participants is Complete Genomics, Inc. (GNOM), currently trading at around $4 per share, with a market cap of $129 million. Like so many other biotech plays, GNOM hit rock bottom in last year’s sell-off, sinking to as low as $2.21 per share, about a 90% haircut from its 52-week-high of $18.55 per share. GNOM’s claim to fame is that they have developed a proprietary DNA sequencing platform for use in analyzing gene composition.
GNOM is a money-loser, and is expected to show losses in the neighborhood of .60 cents a share in its upcoming March earnings report. However, the company just cut a significant deal to provide the Mayo Clinic with their services, and remains an issue to keep on watch as the personalized medicine movement gains steam.
A direct competitor of GNOM is Pacific Biosciences of California (PACB), whose stock performance is almost a mirror image of GNOM’s. During last year’s market carnage, PACB’s shares slid from the mid- $15 range to a 52-week-bottom of $2.25 per share. Currently trading at around $4.30 per share, with a market cap of about $240 million, PACB recently reported better-than-expected earnings, but lost $22.8 million last quarter. Still, as a charter member of the gene-sequencing sector, it too merits monitoring in the months ahead.
Finally, there’s Human Genome Sciences, Inc. (HGSI), which was one of the first companies in the space to garner widespread attention for gene-related therapies. The company has several promising products in its pipeline, and an ongoing clinical development relationship with GlaxoSmithKline. Like GNOM and PACB, HGSI stock has fallen on hard times, currently trading at about $8 per share, about 75% off of its 52-week-high.
Given the promise and proven value of personalized medicine, I’m guessing that it’s only a matter of time before stocks in the sector once again find favor with investors. If and when they do, this brave new world of science, which is already paying dividends for patients, could very easily translate into solid trading profits.
Share your thoughts and opinions below.
CEO, Wealthpire Inc.