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The COVID Bottleneck Worth Billions for These Biotech Stocks

Written by Keith Kohl
Posted October 20, 2021

Most investors only dream about a day like May 6, 2020.

For a small group of biotech investors, it was the single most profitable day of their lives. 

You see, a few months prior to that date, a small company by the name of MacroGenics had submitted its Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA). 

This wasn’t some off-the-shelf generic aspirin, mind you. 

The company was developing a drug called margetuximab to improve outcomes for late-stage breast cancer patients with a genetic mutation called HER2.  

On May 5, you would’ve been able to pick up shares of MacroGenics for under $7.50 a pop.

By 1 p.m. the next day, shares had soared nearly 180%!

mgnxstock

It turns out the company was on track to report some very good news regarding the Phase 3 SOPHIA study of margetuximab in HER2-positive breast cancer by the end of the year. 

If approved, the company would then be able to commercially launch its drug and rake in millions in revenue. 

On December 16, 2020, MacroGenics announced it had been given the green light to launch margetuximab.

That approval was the linchpin for a windfall of cash to reach the company's pockets.

Unfortunately, these success stories have been few and far between during the pandemic. 

And it’s all because of one massive bottleneck that has stalled the development of critical new drugs, costing the industry billions of dollars. 

But you know how that saying goes, don’t you?

Every crisis breeds opportunity. 

However, this opportunity won’t remain open much longer.

A Biotech Crisis Costing Billions

What were your first thoughts when the COVID lockdowns were hammered into place in March 2020?

While most people were concerned about how many pallets of toilet paper they could amass at the nearby Costco, a crisis was brewing in the biotech industry.

You see, in order to approve a new drug, the FDA must conduct an on-site inspection of the manufacturing facilities.

When the FDA announced that it had suspended all its inspections due to COVID-19, it had a catastrophic effect that rippled throughout the biotech sector. 

Rather than getting the stamp of approval, companies suddenly started learning that their approval decisions were being deferred. 

And if your company was planning on manufacturing your product outside the U.S., having your facility's inspection postponed felt like a killing blow to your launch timeline. 

According to a report from the Government Accountability Office, the FDA was unable to complete more than 1,000 of its planned inspections in 2020. 

This was a huge deal too.

By May 2020, approximately 74% of facilities manufacturing active pharmaceutical ingredients and 54% of those manufacturing finished drugs for the U.S. market were located outside of the United States. 

You can probably guess what happened next. 

The bottleneck that developed swelled to epic proportions. 

This was a wake-up call for the FDA, and you don’t need me to tell you the kind of opportunity staring back at investors in the biotech industry

But if you’re trying to ponder just how lucrative this market will become in the near future, let’s put some concrete numbers on it, shall we?

According to growth estimates, the biotech market is projected to reach $2.4 trillion by 2028!

Like any sector ripe with profits, these inspections are “make it or break it” events that could end one of two ways…

Wild, unimaginable growth or utter bankruptcy. 

The good news is that there’s a shining light at the end of this tunnel, and the FDA is only now starting to address this crisis. 

Tomorrow morning, I’m going to lay out all the details to this situation and show you exactly which companies will be the first to break through the FDA’s bottleneck. 

Stay tuned.

Until next time,

Keith Kohl Signature

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing's Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.

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