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Biotech Investors: Please Don't Make This Mistake

By | More Articles
February 22, 2013 | Comments (5)

Trying to accurately value a biotech stock isn't just difficult -- sometimes it seems downright worthless. After all, how can investors even try to value a company that hasn't booked a dollar in revenue?

In the following video, Brenton Flynn walks through a commonly used method for valuing biotech stocks and offers a word of caution for investors in companies like Arena Pharmaceuticals (NASDAQ: ARNA  ) , Threshold Pharmaceuticals (NASDAQ: THLD  ) , and Pharmacyclics (NASDAQ: PCYC  ) , which are waiting on lucrative milestone payments.

Is Arena's reward worth the risk?
With Belviq's FDA approval now a distant memory, investors are scrambling to decide whether to buy or sell Arena. In the Fool's premium research report, senior biotech analyst Brian Orelli takes you through a comprehensive look at this contentious stock, including its massive opportunity, potential pitfalls, and key reasons to both buy and sell. To find out more about Arena -- and get a full year of updates -- click here to access your report today.

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Brenton Flynn has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 22, 2013, at 7:09 PM, bonhead wrote:

    Brenton Flynn .You did it again .You have to have motive to go after arena over and over again .You doing it for profit .You are Shaddy Bro .No one believe on you no more specially. when your writing over and over. over the same Arena .No one believe on you or your fools any more .Arena is up now after market. thanks to your bashing

  • Report this Comment On February 22, 2013, at 8:16 PM, gazoo99 wrote:

    First of all Brenton.....you're a nut bar!

    Don't talk about earnings until the stock has been allowed to launch!

    ARNA is going to market most likely March 4th 2013.

    YOUR QUOTE:

    "Trying to accurately value a biotech stock isn't just difficult -- sometimes it seems downright worthless. After all, how can investors even try to value a company that hasn't booked a dollar in revenue?"

    Maybe let them go to market......

    Then comment on revenue!

    We'll wait.... then we'll see..... VVUS will be crushed!

    ARNA will get out of the gate running at high speed.

    They're ready to go right out of the gate with marketing.... and the product is now in the pharmacies ready to be sold!

    JUST WAIT FOR THE ADVERTIZING CAMPAINS>>>> BY THE WAY THAT VVUS "CAN'T" DO!!!!!!!!!!!!!!!!!!

  • Report this Comment On February 23, 2013, at 4:10 PM, billcatedit wrote:

    Title should be Biotech Investors: Please Don't read any article written by me Brenton Flynn

  • Report this Comment On February 24, 2013, at 7:34 AM, gyrohelmet wrote:

    biggest problem with the fools is that none of their anal ysts have enough years behind them to have

    legitimacy. yes, you can run various programs and

    come out with a prediction but that is what it is - a prediction. flynn is too green behind the ears to trust.

  • Report this Comment On February 25, 2013, at 5:33 PM, SamFreedom wrote:

    Oh, hey its Comrade Flynnovsky, the "Health Bureau Chief". Which just his to show you can make a dog sound important by giving it a title but its still a dog.

    I used to respect Motley Fool back in the day but it seems they have been steadily losing their way with garbage like this, for example.

    How ironic is it that the the opening basically warns speculators but how is this accomplished?

    BY SPECULATING.

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