MR MONEY MAKER: Kidney cancer drug Clinigen Proleukin a booster for beaten pharmaceuticals
What is happening?
It was hardly surprising that with a pandemic causing chaos, everything and anything was put aside to make sure we were successful out of the crisis.
And so now we are starting to see that the wait lists for other life-saving treatments have become long and worrying.
The direct effect of this was that any company involved in these delayed actions would suffer, and the pharmaceutical world was no exception.
Looking to the future: In 2019, Clinigen purchased the exclusive rights to Proleukin, a well-regarded kidney cancer drug
Why is it important?
I consider pharmaceutical development to be a game of mouth unless you’re someone like Beaker, the Muppets’ assistant to Dr. Bunsen Honeydew.
Unless you are familiar with the specific area of expertise in medication adequacy, you might as well be playing a coin toss.
But investing in a company that has made developments that have already been exploited is another matter.
In 2019, Clinigen purchased the exclusive rights to Proleukin, a well-regarded kidney cancer drug. Of course, as Covid ravaged the country, so many other operations were put on hold, as were vital sales of this drug.
The result was inevitable and only a few weeks ago we received a profit warning from the company. The stock price quickly felt out of bed and fell 25 percent.
What should I do?
If we assume that we can finally see some control and management of the Covid virus, then attention will once again turn to those other vital operations that had been delayed due to the pandemic. The result should therefore be a clear cause and effect line, as other trades will see demand for the drug return and the recent fall in prices will likely be seen as an overreaction from a nervous market.
The first suggestion is simple. If you think the worst is over, I would buy a modest stake in this stock to take advantage of what I see as a short-term haircut.
If you want wider exposure to this area, but rightly fear picking a ‘winner’ (or loser), then the L&G Pharma Breakthrough UCITS ETF, which invests in a range of companies committed to finding “orphan” drugs, may be a more appropriate choice.