Kite: New National Cancer Inst. study just publi

Investment Analysis Clubs Saul’s Investing Discussions
23

Chris,

I agree this is high risk, high reward for one stock. That is why that I recommended that people open only a SMALL position. In fact, I recommended options to keep investments even SMALLER. I consider this to be much better odds than a toss of the coin. To those who consider this gambling rather than investing I would point out:

  1. There is solid efficacy data.
  2. We have a 3 companies developing technology: Juno, Kite, and Novartis.
  3. One or more of the companies is likely to win big.
  4. There is no law against investing a small amount in each company.
  5. The total addressable market is likely tens of billions of dollars.

If someone were to invest 1% of their portfolio and wait 5 years, what do you think the odds are that this would be a market beating strategy? Can I give you exact drug costs and margins? No. All I can say for sure is that this will be BIG. There are certainly legal risks, but there are no market risks. People will pay a premium to get this treatment. I think that Kite is likely to win approval probably this year or possibly slightly later. I will keep an eye on the other two companies, and be willing to invest in them too if and when they make progress on the legal front or with drug development. As a group, I consider these stocks to be a worthwhile.

Investing is all about taking intelligent risks. For example, you might consider ANET a good investment. It’s performing well in the market, and it seems to have the best networking technology. Is it possible that their product becomes obsolete someday? Sure, but I think it is a winner for the foreseeable future. The key is to know yourself. If ANET and KITE are too risky for you, by all means buy something like Disney. There no right, wrong, or stupid answer. It’s an individual thing. For biotech, most investors either go big and lower risk (e.g. CELG) or get a basket of smaller stocks. In the case of CAR-T therapy, I think the odds are strongly with this group beating the market.

Best,
bulwnkl

Long KITE 1.3%
Long ANET 7.6%
Long CELG 8.0%
Long DIS 5.8% (LOL)

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