Arbutus Biopharma (ABUS)

The ultimate spec. It loses money. Now at $3. A casino.

They are known for their Ebola treatment but people lost interest in them and the stock started to sell off. They then made a deal, but he wonders if it was made in order to prop up the share price. Wouldn’t Buy the stock here as it is pretty expensive and it is not proven yet.

He has to be careful, because one drug could be a home run, but he has stayed away because it is so hard to predict how drugs will do through the whole approval process. You get a product that looks very promising through the first few stages of testing and trials. Right at the end, when they do the large scale trials, something turns up that hasn’t been seen in the smaller trials. To bring a new drug through the approval process is upwards of $1 billion. Because of this, they usually end up partnering with a big Pharma, and the value goes to the big Pharma.

This company works on Ebola treatments. A stock like this is driven by news. There is seasonality to biotechs from June 23 to September 13, but in this case there is too much news going on.

Doesn’t know exactly what is going to happen with the treatment of Ebola. The stock has had a tremendous run. They are miles away from being a valuation story at this point. If you have made some money in the stock, he would be inclined to take profits and move on.

It is up a lot, but it is just so speculative. It is not his cup of tea. If the outbreak of Ebola starts to come under control, then this stock should decline back down.

A play on ebola could have a nice kick up now, but looking at the financials, they have lost money in 8 out of the last 10 years. This does not bode well. Also, they are not at all close to getting the product into the market. The testing for their product was actually for another product, so they are going to have to have a certain amount of latitude in getting it out. He would prefer Alpha Pro Tech (APT-A).

Working on an experimental Ebola treatment. The biotech sector is probably the most volatile sector that you can get involved with. He would never buy just one biotech stock; he would buy a basket of 3, maybe 5. He wouldn’t touch this one. Too volatile and too risky.