If you're interested in trading pharma stocks, you've gotta learn a few basics first...
| | | Pharma Stocks: What Swing Traders Need to Know | ✔️ How to maximize potential and minimize the significant riskwith pharma stocks...
✔️ What does it mean to 'fast-track' a drug …
and what can that do to stock prices?
✔️ Do you have minimal trading time but seek maximum impact?
| | There's a reason why so many traders are drawn to the pharma sector. Pharma stocks can experience insane, rapid spikes. The rewards can potentially be huge. I've seen stocks run 1000% or more* in a single day! But don't get fooled — big moves like that are few and far between. Ultimately, most new drugs will never even make it to market. This year, the sector's been hotter than ever thanks to speculation about a vaccine for COVID-19. You've probably heard terms like 'phase three trials' and 'fast-tracking' ... but what do they even mean? If you're interested in trading pharma stocks, you've gotta learn a few basics first. Stocks in this sector are different from other industries. Development from concept to approval can take years. Drug trials cost a lot of money … where does that cash come from? Trading pharma stocks is far from 'easy money,' but the potential remains. If a company does bring a successful product to market, it could potentially be huge. Wanna know more? Keep reading… |
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Are you: … Out of work or looking for new sources of income? … Looking for a way to make money from home so you can have more free time with your family or travel the world? … Trying to unchain yourself from the 9-5 job you've been dreading for years, but not sure how to start? … New to trading stocks, with NO IDEA where to start? … Investing in the stock market but not getting anywhere? If that's you... |
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When I say 'pharma,' I'm referring to pharmaceutical companies. These are companies that are working on creating new vaccines or drugs that prevent or treat various conditions. Many pharma companies are small, with only a few products. Some are working to treat a currently incurable condition; others are seeking to improve or replace an existing treatment. It's a noble cause, sure ... but these companies aren't charities. For a pharma company, the financial rewards can potentially be huge ... if and when a breakthrough gets to market. But going from the research lab to patients isn't an easy process. Getting FDA approval is a long, grueling, and costly endeavor. Most pharma companies have limited resources — there's a constant need for cash to keep research and trials going. Unlike traditional businesses, a good portion of pharma companies have no revenue for years. That means traders have to approach these companies differently... | The Bitter Pill: Pharma Companies Always Need Cash All businesses need cash to operate. Employee salaries, rent, supplies ... plus, you've gotta keep the lights on. Without operating cash, there's no business. Pre-revenue pharma companies also need to pay for research and development. The goal is to one day sell the product and make a profit — but the early stages still require funding. Where does the cash come from? Sometimes, it comes from another larger pharma company in the form of investment. Other times, it comes from a grant — often from a university or government. Outside investment is usually a bullish sign — it indicates that big money believes in one of the products. But cases like this are exceptional. For the most part, pharma companies raise cash by selling stock. That means existing shareholders are constantly being diluted. That's bearish. Pharma companies come in all shapes and sizes, and might be funded in any number of ways. But one thing they all have in common? A rigorous trial process. Understanding the trial phases can help you understand how pharma stocks can move … and help you figure out when to buy and sell. | |
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| | Tim Sykes is the most sought after mentor when it comes to trading penny stocks, and he wants you to get in on the action... He created Supernova Alerts so you can be early on a stock that give the telltale signs that it just might be about to skyrocket… Don't show up late to the party ever again... |
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Before any new drug or vaccine is brought to market, it's got to go through four trial phases. These can vary slightly depending on how urgently the drug is needed and how well each trial goes. Here's a rough guide to how the process typically unfolds: Phase One: This phase involves 20–80 people or animals, and lasts about a year. The product is given to healthy subjects to make sure it doesn't cause any harm; subjects will get different doses on different timelines. Researchers want to determine the best dosing regimen. Phase Two: This phase involves 100–300 people; the average length can vary from one to three years. The product is tested on patients with the condition the product seeks to treat. The goal of this phase is to establish solid proof of the product's concept and to make sure the drug does more good than harm. Phase Three: This phase involves 1,000–5,000 people, and can go on for an additional two to three years. In this phase, the goal is to gather a larger set of data. With more data, it's possible to compare the existing standard of care, the treatment, and a control group that's given a placebo. This data will be submitted to the FDA for approval. Phase Four: Once a drug is approved by the FDA, it's released into the world. Sometimes it's on a prescription-only basis; other times, it can be purchased over the counter. During phase four, the company must continue to collect data on the patients. Long term effects may get discovered in this phase, so it can run for decades. The FDA will track the data and can still potentially choose to cancel the approval.
Phase four isn't very well known — but it can bring disaster to your portfolio if you're caught off guard!
Each phase takes a lot of time (we'll review fast-tracking in a bit.) And each phase comes with its own set of costs. As a trader, it's your job to navigate the phases, cash flow, and trial results. | Healthy and Smart Pharma Trading All publicly-traded companies are required to make quarterly filings with the SEC. In these filings, they're obligated to disclose things like cash on hand and cash burn rates. For pharma companies, these filings often include anticipated trial results dates, too. Only 10-15% of pharma products that go into development are ultimately approved. As a result, I'm typically not looking to buy and hold these stocks. My approach? Trade at key times and get out before something changes. I never hold a position through a news event. Each trial phase can take months or even years — and the results are a total gamble. I'll trade these stocks right before a big announcement or right after — and I typically don't hold positions for long. When the stock price does spike, cash-strapped companies can move quickly. If there's a need to raise more cash, an offering usually follows any big price move. The new offering is typically below the current share price, which can drive the price down. Remember: selling stock is bearish. Stock price moves based on supply and demand. New supply can drive the price down. So no matter how great the news sounds, always be wary of a new offering. On the flip side, there's one thing that almost always increases demand... |
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| | | When I was in my early 20's, I found something in the market. Then I found it again. And again, and again, and again. After exploiting it over and over for weeks and months on end… it eventually led to a six-figure and then seven-figure income over my career. | | |
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You've seen the news. The search for a COVID-19 vaccine has put pharma in the spotlight. Several pharma companies have been granted a fast-track approval process. Fast-track status doesn't guarantee approval — it only speeds up the review process for each phase. However, fast-tracking is often viewed as a positive sign, and it can lead to stock spikes. Fast-tracking can allow experimental drugs to be given to very sick patients before final approval. This typically only happens with extremely deadly conditions where the potential downside is very low. Treatments may also be given accelerated approval, breakthrough therapy, or priority review designation. Each of these designations provides front of the line status to promising treatments and gives investors something to get excited about. Just like any other spike, this gives the pharma company an opportunity to raise cash. Be sure to watch out for dilution and be sure to sell into any big price spike. Expedited review still takes time. The FDA's standard review time is 10 months. The lowest tier, priority review, narrows the review time to six months. Also good to know? Faster review doesn't give a drug a better chance of approval. So don't buy and hold — instead, trade the trend and manage your risk. | Your Prescription? Trade Intelligently. Pharma companies have the power to change the world. But the process of actually getting a new drug to the market is extremely difficult. Developing drugs takes time. The approval process is slow and can cost billions. It's rare for a pharma company to receive FDA approval. But they can still create opportunities for traders throughout the four phases of approval. If you're going to trade pharma stocks, do so quickly and deliberately. Don't hold and hope — a new offering or trial results could happen at any time, and even after the treatment is approved, the FDA could still pull it off the shelves at any point. Don't be blinded by the promise of riches — trade smart, and always have an exit plan in mind. Trade in good health, Paul Scolardi Editor, Swing Trade Millionaires | P.S. Everyone's trying to trade lately… You can see it in the massive amount of Robinhood traders in the market. And most of these people have no idea what they're doing. That's not okay… Because these people get crushed. Without knowledge of the market, they lose… And lose BIG. Well, for the new traders out there… Legendary trader Tim Sykes and his student Matt Monaco can help. They just launched a program for BRAND NEW traders… An EASY program that can be your launchpad into the market. To help you understand simple strategies millionaire traders use every day. If you're unsure about where to start your trading journey… Click here to see more | | *Results not typical. Paul Scolardi teaches skills others have used to make money. Most who receive free or paid content will make little or no money. Most traders lose money. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services. Past performance in the market is not indicative of future results. | This is for information purposes only as Millionaire Media, LLC is not registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. We are not a licensed investment professional, and we do not give investment advice. Always consult a licensed investment professional when seeking investment advice. Millionaire Media, LLC cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media, LLC in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media, LLC accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns. | | |
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