SPC Premium Dossier: The Biggest Blockbuster Drug of Your Lifetime: Stock 1

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I’ve spent decades following biotech and Big Pharma firms – cracking them open as a business reporter and running the numbers as a veteran stock-picker.

So I understand that if you want to find and snag the biggest winners before they start their run, there’s one lesson you need to understand before anything else.

For the sake of simplicity (the prime directive here at Stock Picker’s Corner (SPC), I refer to it as “Biotech Math.”

And it consists of these five simple points:

1.     It takes more than a decade and as much as $2.6 billion to develop a new drug.

2.     On average, only about 250 drug candidates out of 5,000 to 10,000 make it from the researcher’s bench to preclinical testing – and only one or two make it to market approval.

3.     Fully 90% of drug candidates that actually make it into clinical trials fail to make it through the three-stage U.S. Food and Drug Administration (FDA) process for market approval.

4.     Once a drug achieves approval, gross margins can exceed 90% – albeit not forever.

5.     These pharma creators only have 20 years of patent protection for a drug – half or more of gets eaten up by development and approval. (After which generic contenders can drain away 90% of sales.)

In short, the stakes are huge – heck, downright massive – for biotechs and pharma companies.

And for their investors.

I can’t tell you how many times a company reported some upbeat early test results on a much-hyped drug candidate – shooting its share price higher – only to have its shares get crushed when toxicity, lack of effectiveness or other issues tripped up the therapy’s journey through the FDA approval process.

That crushes the stock price … crushes the company’s future … and crushes the shareholders.

There’s an answer. For drug developers. And for Wealth Builders … like you and me.

I’m talking about “The Blockbuster.”

In the pharma world, this word has a very special meaning. That’s a drug that generates yearly sales of at least $1 billion for the company that created it.

But it’s usually more … much more.

The first Blockbuster was the antacid drug Tagamet, which hit $1 billion in sales in 1986. The two biggest of late (besides the COVID-19 vaccines) are the AbbVie Inc. ABBV 0.00%↑ arthritis-battler Humira, with peak yearly sales of about $22 billion, and the Merck & Co. MRK 0.00%↑ anti-cancer drug Keytruda, which rings the register at about $21 billion a year.

I told you about “Biotech Math.” Now it’s time to share “Biotech Investing Rule No. 1.”

And here it is: When you find that “Next Blockbuster” pharma stock – and you find it early – grab it … go along for the ride … and turn yourself into a Wealth Builder.

I’ve found that “Next Blockbuster” for you … one whose trajectory will rocket it past Humira … with some analysts estimating peak sales of $50 billion or more.

The average investor hears those numbers … and understands that they’re big.

But they underestimate the impact. They don’t see all the “triggers” … the catalysts … that can ignite this huge wealth window. 

But I do.