SDDGR: Selling Shovels During Gold Rush
We are in the midst of a biotech boom. SDGR sits to profit greatly, selling cost/time saving software. They sell drug/material discovery software to biotechs and pharma companies. They also fully or jointly own some early stage/preclinical drug programs as well. Here are the investment highlights I believe are key.
1- Their physics based software makes new drug/material discovery cheaper/faster than traditional ways. This first step is the most costly/lengthy part in creating new drugs/materials.
2- They are a biotech in the respect that they are owners/co-owners of certain compounds in ongoing development/trails, giving them enormous upside. Joint ventures are as far as phase 2.
3- Strong balance sheet behind a secondary offering in August. Roughly 3.5 years worth of operating expenses in cash on the books.
4- Strong partnerships with big pharma such as Bristol-Meyers. Ongoing focus on research and development, putting 65% of revenue towards it.
5- Smart money is in on this. Bill/Melinda Gates foundation, billionaire investor David Shaw and his old life science hedge fund Deerfield along with another MP from Deerfield are all 10% owners.
6- Technically, it is also in a nice set up. It had been trading in a pretty tight channel before yesterdays' nonlogical sell off (no news). It has had a nice rebound today and I am expecting it to make a push back to that $97 resistance level. If it can break that, I think a move to the $130s is in store within the next 6 months
1- Their physics based software makes new drug/material discovery cheaper/faster than traditional ways. This first step is the most costly/lengthy part in creating new drugs/materials.
2- They are a biotech in the respect that they are owners/co-owners of certain compounds in ongoing development/trails, giving them enormous upside. Joint ventures are as far as phase 2.
3- Strong balance sheet behind a secondary offering in August. Roughly 3.5 years worth of operating expenses in cash on the books.
4- Strong partnerships with big pharma such as Bristol-Meyers. Ongoing focus on research and development, putting 65% of revenue towards it.
5- Smart money is in on this. Bill/Melinda Gates foundation, billionaire investor David Shaw and his old life science hedge fund Deerfield along with another MP from Deerfield are all 10% owners.
6- Technically, it is also in a nice set up. It had been trading in a pretty tight channel before yesterdays' nonlogical sell off (no news). It has had a nice rebound today and I am expecting it to make a push back to that $97 resistance level. If it can break that, I think a move to the $130s is in store within the next 6 months
Comment:
SDGR has made a beautiful move since this post. I would be buyer on all multi-day pullbacks in this name. Loving how that $97 resistance level now seems like it is a support level.