Warren buffet and pharma Promising biotech
On the TSX, Bellus Health (TSX:BLU)(NASDAQ:BLU) isn’t attracting investors’ attention. The biotech stock is faring poorly in 2020, with its 57.39% year-to-date loss. This $327.5 million clinical-stage biopharmaceutical company develops therapeutics for the treatment of chronic cough and other hypersensitization disorders.
BLU-5937 is Bellus’s lead candidate and catalyst for growth. The stock hasn’t taken off because the drug is still under development. According to Roberto Bellini, president and CEO of BELLUS Health, the trials are progressing, and the biotech firm is completing key steps required to advance the development plans for BLU-5937.
Bellus is refining its clinical strategy for BLU-5937 based on learnings from the Phase 2 RELIEF trial. The trial design of the Phase 2b SOOTHE trial is ready for initiation in the fourth quarter of 2020.
Management believes the mechanism of BLU-5937 may have broad applicability as a potential treatment for many additional hypersensitization-related conditions. Hold off buying Bellus in the meantime. The biotech stock should generate interest once the firm delivers on its milestones.
End of a health crisis?
In some way, COVID-19 must have given drug stocks a boost or tailwind. For Warren Buffett, he won’t make the same mistake again. Berkshire Hathaway bought four pharma stocks at relative bargains. Also, Buffett loves cash cows. The big drug makers generate significant operating cash flows.
One analyst notes that Buffett usually makes investments on the tail end of a crisis. Does it mean the health crisis is ending soon? No one can tell for sure, but his new positions indicate pharma stocks are great value buys today.
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