As I’m sure you know by now, the market got hammered this past week and we’ve seen one of the worst selloffs since the financial crisis in 2008.
Companies are delaying their planned IPOs as the coronavirus rocks the markets and lowers investor interest in adding new stock positions.
Carlyle Group, a German specialties chemical manufacturers, specifically withdrew their U.S. IPO plans on fears of how coronavirus could affect their valuation.
The thing is, risk appetite is lower right now and companies are more inclined to build a book during times of less volatility.
But that doesn’t mean we can’t take some exciting profits on IPOs in the coming weeks.
We can find IPOs to go short on. And we can also find IPOs that are displaying some market divergence — meaning that they are trending up even while the overall market is down, a bullish sign.
Right now, we’re seeing a lot of market divergence in the biotech sector right now for obvious reasons.
While most of the recent 2020 biotech IPOs aren’t directly involved in coronavirus vaccine research and development, a lot of biotech and healthcare companies in general could benefit from sympathy plays.
That means that when one biotech company gets a pop, other biotech and healthcare companies could experience a corresponding uptick.
Today, I want to look at a few recent biotech IPOs that could be ripe for breakouts.
Novavax (NVAX) said on Wednesday that it hopes to develop a successful vaccine for coronavirus.
They said that they hope to narrow down their vaccine candidates for human testing by the end of spring 2020.
So when the market tanked on coronavirus fears following news of more cases popping up in the U.S., the stock caught a pop.
Let’s take a look at a few of the biotech IPOs that I think could pop thanks to a sympathetic push from Novavax.
Beam Therapeutics (BEAM)
Serious diseases are the focus of a dedicated team of researchers at Beam Therapeutics.
The company hopes to advance cutting-edge science by developing new precision medicines that can help countless people around the globe.
The company is making use of CRISPR technology, which is an effective way of editing genomes — meaning that researchers can literally change DNA sequences and alter gene function.
Many people believe that CRISPR technology will really change the world because it could radically shift how we prevent and treat diseases.
The fact that Beam makes use of CRISPR makes it a real pioneer in the healthcare industry.
The company offered 6.25 million shares during its IPO on February 6.
And while the company had initially anticipated a price between $15 and $17, it opened at $18 on the first day.
The IPO was an immediate success, surging by over 55% during its very first week.
I-Mab Biopharma (IMAB)
I-Mab Biopharma also seeks to treat serious diseases.
The company is committed to the discovery, development, and commercialization of biological breakthroughs.
While they are focusing particularly on cancer and autoimmune disorders, I-Mab Biopharma may be prone to some sympathy plays from coronavirus stocks since this company originates in China.
The company has two pillars, including a fast-to-market approach and a fast-to-PoC (proof of concept) global approach.
With their emphasis on speed, I wouldn’t be surprised if this company attracts some attention during the coronavirus outbreak.
AnPac Bio-Medical Science (ANPC)
Another biotech company that originated in China, AnPac Bio-Medical Science focuses specifically on cancer and believes that the best way to beat it is to catch it early.
The company aims to advance cancer screening CDA technology and expertise from a variety of disciplines.
In order to accurately screen for cancer, the CDA technology requires only a standard blood sample. This makes detection easy and allows doctors to help cancer patients much earlier on.
The CDA device uses an integrated sensor system to identify biophysical signals in the blood at the protein, cellular, and molecular level.
In doing so, AnPac Bio-Medical Science is able to identify the risk of 26 different types of cancer.
And get this: among the 140,000 scans that this biotech has conducted, they’ve scanned so deeply that they have been able to identify pre or early-stage cancer in many patients that were previously diagnosed as cancer-free by more traditional methods.
The thing is… I won’t be looking to buy and hold these for the long term. You see, if these stocks do move based on the coronavirus, if and when the news dies down… these stocks could experience a violent pull back.
Now, I’ll be keeping a close eye on these for short-term trades, and if I see my patterns come up, I’ll be ready to strike and let my clients know about my every move.