investing

Is $BEAM Therapeutics a good buy?

I invested a week or so ago in this company, and was waiting for a while to get some time to explain why I did.

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Right after I purchased $BEAM, it dropped 10% that same day, and then another 10% the day after. Today it got up 16%. Just to give you an idea of how volatile this stock is, and why you should take caution if you invest into $BEAM.

When I first purchased it, it felt like I was catching a falling knife. I thought it hit the ground so I wanted to pick it up, but the ground was still a long way out and it cut me pretty good. Of course if a stock drops 10% you want to re-evaluate your position to buy it. I did that and came to the conclusion that for the long term I should remain allocated in $BEAM Therapeutics and ride the waves of volatility.

Just to give you an idea, I bought it the 3rd of March when it was at $84. Of course I will track the monthly progress of $BEAM in my monthly portfolio updates.

It might seem like I purchased it just before the fall, but have a look when we zoom out, where I found it:

At this point it had already dropped 33% from its all time high at $120.

It is something I like to do: try to catch stocks when they have dropped a large amount. I did something similar with $Galapagos and $Palantir. Keep in mind I only do this with stocks that I want to invest in long term. I am not a short term investor, I really need to believe in the stock so I feel comfortable that if they would take a dive they will come back up again.

Anyway while its now trading at 82$ its hard to say where it will go next. The 1200$ stimulus from US might have gone in part in this stock making it rise with a crazy 16% at the time writing, without really any big news. That does make me think that I’m not the only one who has noticed an opportunity.

Four reasons why $BEAM Therapeutics is worth your attention

#1 They just might have the most ground breaking gene therapy as of yet

Forget about traditional medicine. Gene therapy is supposed to be the future. We still have to see this in practice, however right now it does look promising. $BEAM is not the only company that uses this therapy but according to experts $BEAM technology is just a bit more advanced.

On their website they state

Beam Therapeutics is a biotechnology company committed to creating a new class of precision genetic medicines based on our proprietary base editing technology, with a vision of providing life-long cures to patients suffering from serious diseases.

Sounds impressive right?

How about this one?

Base editors enable us to precisely and permanently rewrite a single letter of the genome and potentially create life-long cures for patients suffering from serious diseases.

Did that got your attention?

#2 If they follow trough the impact they can have can be HUGE

Beam is targeting gene therapies in the fields of hematology, oncology, liver diseases, and ocular and central nervous system (CNS) diseases.

Lets be honest if this company can find a cure for cancer do you feel its current valuation of 4.83B is justified? This is one of the most common reasons why people die worldwide.

Of course this is a very strong statement and we are a very very long way from putting this into practice, and this could be the main reason why the stock is even overvalued right now.

So if you’re buying you are taking a risk of what the company could do in the future, but there is no guarantees there, that’s why its also high risk.

#3 They are ahead of the competition

Again I need to quote their website.

(i) a CRISPR protein, bound to a guide RNA, that leverages the established DNA-targeting ability of CRISPR, but modified such that they do not cause a double-stranded break, and (ii) a base editing enzyme, such as a deaminase, which carries out the desired chemical modification of the target DNA base. This proprietary combination enables the precise targeting and editing of a single base pair of DNA, which has not been previously possible to our knowledge.

The main thing here is they are bringing something unique, that was never done before.

When we read about gene editing we are thinking about the movie Gattaca for example. The downside there? It can only be done to unborn children. In this case $BEAM will be able to edit anyone’s genes. They also claim their tech (and this is also why they are ahead of the competition), will have no side effects unlike the older generation of CRISP tech startups.

#4 The pipeline looks promising

Sickle cell disease is more common with people with African roots, in certain countries like Nigeria 30% of the population could have this disease. In US about 8-10% of the African American population has Sickle cell disease or about 100.000 people. There is no known cure.

Leukemia is one of the most common forms of cancer, about 10% of people having found to have cancer has Leukemia. There is no cure, although it can be treated.

I’m not going to go trough the entire pipeline, but what you should know is that for all items in the pipeline there is no known cure. So $BEAM would absolutely dominate the market.

The pipeline does also show me some risks. This company is at the very beginning of its development. At best their first therapy’s are approaching phase 1&2. Even if successful we can be years away from bringing this to market. From idea to actual medicine it usually takes about 10 years, so its really hard to tell when $BEAM can bring anything to market. Perhaps in 5 years if we are lucky?

This means is a high chance that investors who went in because the stock is bullish will lose interest and turn away. Especially if some of these medicines prove to have bad results, and the chance of that is statistically speaking in traditional medicine quite high.

But if you have patience you could be on the front row to groundbreaking discoveries and that is what this stock is all about!

What are the downsides of $BEAM?

I named a few already, the main being that we could be years away from $BEAM bringing anything to market, and this will most likely mean some investors lose their interest.

Also the volatility of $BEAM is rather a downside then an upside.

Another is revenue. Most company’s that have their IPO usually already have some revenue and some revenue growth projections. $BEAM has a current revenue of about 24k per year. This is quite low and it makes an uncertain future. $BEAM Therapeutics might need more money at one point to support its pipeline, so perhaps they will issue more stocks? For me personally this makes it quite hard to valuate this stock.

Remember investing carries risks. You can potentially lose all your money. Always do your own due diligence.

For now I am showing confidence in this stock and bought 14 shares at 84$. I will be on the first row if they find a cure for cancer, or when the stock collapses.

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10 thoughts on “Is $BEAM Therapeutics a good buy?

  1. Thanks for your opinion Steve, although I believe saying its rubbish is greatly underestimating how Gene Therapy’s could overtake the current medicine market and cure diseases like cancer or blindness. Is that not worth a gamble?

    Also in terms of valuation right now its valued at 5 Billion. Its high enough to be taken seriously, but also low enough to say its not overvalued.

    Its high risk for sure and we probably won’t know if I am right for another few years when we actually start to see the results of their pipeline.

    To answer your question: yes I am prepared to ride it up and down for as long as needed. It dropped 20% before, and I waited it out then, so I am prepared to do it again.

    Like

  2. The problem with anything biotech is that there is always a lot of potential profit but a lot of it is just that, potential. It doesn’t take much for these companies to come crashing down. I’m curious how it’ll evolve and hope that you picked a winner 🙂

    Liked by 1 person

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