Dr J Rould
Full-Time Tech Investor, Quantum/Cybersecurity, Philosophy Background
Vertex Pharmaceuticals' best gains have already happened: it has been a 50-bagger over 20 years and is now a giant with a $137 billion market cap. Smaller-cap players in the space are far more interesting, even though Vertex's new collaboration using AbCellera's platform, with Vertex footing the bill, is welcome. x.comÂ
Significant discounts to broader pharmaceutical industry valuations on projected 2031 earnings make some high-quality mid-cap biotech stocks attractive. Many have cleared Phase 3 trials or reached more advanced stages, and some may reach profitability without more capital, an advantage if financing tightens. Selling these stocks to chase speculative biotech or large pharma at historically elevated multiples makes little sense. x.comÂ
Better underwriting at Root, AI data demand at Innodata, defense breadth at Applied Aerospace & Defense, scaled voice AI at SoundHound, more organ access via TransMedics, profitable insurance at Lemonade, autonomous defense at Ondas and successful medicines at AbCellera could drive outsized growth. These eight smaller companies have a realistic path to 5x+ over 5-10 years if they execute on those opportunities. x.com x.com x.com x.com x.com x.com x.com x.comÂ
Small- and mid-cap biotech looks like one of healthcare's more asymmetric setups after a four-year bear market, as AI speeds drug discovery and Big Pharma faces a patent cliff. Over $300B of pharma revenue goes off patent in the next few years, M&A is already ramping hard as pharma hunts for assets, and many small and mid-cap names still trade at reasonable valuations, making them potential takeover targets. x.comÂ
AI drug-discovery picks and shovels such as Ginkgo Bioworks, 10x Genomics, Twist Bioscience and Grail are priced on a fantasy, and secondary offerings are coming. The bet that AI will solve cancers and rare diseases within months ignores how drug discovery, regulation and trial enrollment actually work. Unlike the semiconductor comparison, these businesses have not inflected, mostly burn cash, trade at 20-30x sales and need equity to fund themselves. Buyers here become their liquidity. x.com … Show more
Therapeutics and genomics are a hot theme that retail traders, focused on AI and software, have not yet noticed. Healthcare, drugs and biotech have been strong for the last few months. Favorites in the group are Revolution Medicines, Twist Bioscience, Halozyme and TG Therapeutics. x.comÂ
