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1 Way To Search For The 'Next Big Thing' In Biotech

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1 Way To Search For The 'Next Big Thing' In Biotech
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The graph below was produced by Capital Market Labs.

The health care sector and the biotechnology industry, in particular, have been substantial out-performers in this extended bull market run.

While investors have seen many “nano-biotechs” disappear with failed drugs and FDA panel results, others have boomed from the nano-world to the large-cap world.

Who’s next?

In biotechnology, it starts with an idea and then a product. Together, that means Research & Development.

The chart below displays all of the biotech companies in North America below $1 billion in market cap (x-axis), and their R&D expenses per $1 of operating expense (y-axis).

cml_biotech_rd_xy1113.gif

Of particular interest are the firms spending more than $0.50 out of every $1 in operating expense on R&D.

Synergy Pharmaceuticals Inc (NASDAQ: SGYP), Radius Health Inc (NASDAQ: RDUS) and Argos Therapeutics Inc (NASDAQ: ARGS) are a few of the biggest spenders (on a percentage basis).

Ophir Gottlieb can be found on Twitter @ophirgottlieb.

Posted-In: biotech R&D Biotech StocksLong Ideas Trading Ideas Best of Benzinga

 

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