Biotech Longshots Launch

Building our $2K 10 stock Biotech Longshots

Right off the bat, we are going to warn our readers that all the companies in this portfolio have extremely high levels of risk associated with them. These stocks should typically account for less than 5% of your total investment portfolio and risk-averse investors should look away now. We have a great passion for early-stage biotech companies, but we are managing our risk by only allocating $2000 to this account. 

Biotech Longshots aims to give exposure to the most exciting developments during this golden age of biotechnology. As always with these biotech companies, there is no guarantee that their products will even make it to market, but if they are successful, the upside potential is massive. Some people might view these investments as gambling, we disagree, if you do your due diligence and never succumb to the hype or FOMO, they can definitely be a part of an investment strategy. After all, investing is all about the balance of risk and reward.       

This will be our last individual stock portfolio of US listed companies. We will launch an ETF portfolio in the coming weeks which will bring us to a total of five portfolios ($70,000) each with its own purpose.   

• Core Fund ($20,000) investing in established, growing market leaders. (Risk 6/10)
• Unicorn Portfolio ($10,000) investing in asymmetrical risk/reward opportunities. (Risk 8/10)
• Safe Haven ($10,000) investing in indestructible SWAN (Sleep Well At Night) companies. (Risk 4/10)
• Biotech Longshots ($2,000) investing in the most innovative, early-stage biotech companies. (Risk 10/10) 
• ETF Portfolio ($28,000) investing in the general market for diverse exposure to companies all over the world. (Risk 2/10)

After weeks of research and elimination, we have identified our favourite ten companies with life-changing potential. Our investments fall into five categories which we believe will be some of the biggest themes over the next two decades. Some topics will be covered more thoroughly in future articles.

AI Drug Discovery

Today, we still see that almost  90% of drugs that enter the clinic fail to reach commercialization. These drugs can cost over $1 billion to develop. AI drug discovery is all about using the latest tech to help reduce the cost of drug development and improve the success rate.  All three of our picks have healthy cash reserves and exciting pipelines.

• Abcellera ($ABCL)
• Relay Therapeutics ($RLAY)
• Exscientia ($EXAI)

Proteomics

What comes after genomics? Forbes did an article last year, Proteomics: The Next Truly Massive Investing Opportunity. Opportunity attracts competition and there are already a few public companies looking to dominate this space. It is still very early days and difficult to predict who will come out on top. There is probably market share for more than one company or we might see a similar consolidation in the future, to what Illumina did for the genomics industry. Quanterix, Quantum-Si, Olink, SomaLogic and SEER are some of the biggest names in the space at the moment. Our pick: 

• Nautilus ($NAUT) is creating a platform to quantify and unlock the complexity of the human proteome. They are definitely the most ambitious and also still the furthest away from having a solution on the market. Their goal is to describe a proteome in much the same way you can now sequence an entire genome.  Jeff Bezos is an early investor and they have a team of high profile names.

Synthetic Biology

Engineering life itself. Synthetic biology will transform how we grow food, what we eat, and where we source raw materials. Take a look at this video if you are interested in this sector: How a Bioworks Startup Is Trying To Reprogram the World. We chose to go with a basket approach while this sector is still in its infancy. All three companies are unique in their business model and approach.

• Twist Biosciences ($TWST)
• Amyris ($AMRS)
• Ginkgo Bioworks ($DNA) 

Cell Engineering

Almost all diseases start at a cellular level and these companies are targeting them directly. 

Repairing and controlling genes in cells or replacing missing or damaged cells can solve the underlying cause of many diseases. These emerging capabilities will create novel medicines that meaningfully improve patient outcomes

• Fate Therapeutics ($FATE)
• Sana Biotechnology ($SANA)

Regenerative Medicine

Humans have long been in awe of geckos and their ability to regrow their tails. With advances in tissue engineering, Humacyte is pioneering the development and manufacture of off-the-shelf, universally implantable bioengineered human tissues.

• Humacyte ($HUMA)

Disclosure

This is not financial advice and only the opinions of the author. The $2K is not real money and only a demonstration of a typical portfolio.