The following may be happening that can affect the stock price:
- Presentations or buzz occurring at key scientific and medical meetings; for oncology from which many biotechs sprout, we have ASCO, ASH, AACR, to name a few key meetings.
- Clinical trial results are closely pending or just released. Typically companies dealing with the same or similar technology/pathway are affected by a peer company’s clinical trial results.
- FDA decisions pending or released.
- FDA holds on a clinical trial either imposed or lifted (as with $GERN).
- Management taking the “poison pill” strategy against possible hostile bids (as with $ARIA 2 years ago)
- Earnings are reported (usually at a loss unless there is already a commercial drug).
- Merger & acquisition activity (Drama around $VRX hostile bid for $AGN).
- Licensing announced including upfront/milestone payments.
- Orphan drug designation announced (as with $ISIS recently).
- Key management (C-level for biotech) changes.
- Major insider buys/sells (like when $INO’s CEO bought a ton of company stock as a show of confidence when stock dropped last year because a blogger made unfavorable comments about the company’s drug, or $OPK’s founder buying a ton of his company’s stock last year when $IBB went through a bloodbath.)
- Major shareholder (usually investment firms or hedge fund managers) buys/sells.
For the most part, biotech stocks should be viewed either as a speculative investment and/or truly for the long term. Those who bought $MDVN or $PCYC when these were in double digit prices and held through 2015 has seen their investment double or triple in value. There are those who daytrade and really speculate the sector for its volatility, but that’s a pretty stressful “day job” in my personal opinion.