3 Investment Lessons From Biotech's 2012 Successeshttp://www.fool.com/investing/general/2012/12/14/3-investment-lessons-from-biotechs-2012-successes.aspx Brian Orelli
December 14, 2012
It's been a pretty good year for biotechs. The iShares Nasdaq Biotechnology Index (NASDAQ: IBB) is up 33% year to date, nearly doubling the broader Nasdaq market that's up 18%. But rather than rejoicing (for too long), investors should try and gleam some investment lessons from the successes in 2012 that they can use to make next year even more profitable.
Try, try, try, try and try again
Obesity-drug makers VIVUS (NASDAQ: VVUS) and Arena Pharmaceuticals (NASDAQ: ARNA) didn't have to wait nearly as long for their approvals, but their tenacity is just as impressive. When their drugs were rejected in 2010, the laundry list of items the FDA wanted addressed before it would approve the drug was daunting. It seemed fairly likely that at least one of the items would trip the companies up on their second time through. Instead, both companies were able to convince the FDA to overlook their warts and approve the drugs.
Investment lesson: Don't write off companies just because the FDA doesn't approve their drug on its first try. Although, be careful, as in the case of Surfaxin, it could be a long wait. Investors that bought after the first rejection may never see a profit.
Drug approved, launch already