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 (UNKNOWN: PCYC.DL ) , 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.