/biz/ - Business & Finance

>>12071963
small-cap biotech stocks are different than the rest of the market
all of them operate at a loss initially, because they have to go through the process of developing a drug and getting it approved by the FDA through numerous clinical trials that cost a lot of money
with a small-cap biotech company, you shouldn't be asking "how profitable is this company", you should be asking "does this company have enough money to fund clinical trials" and "does the company have good science supporting the drugs they're making"
what determines if a company makes it through the extremely costly and time-consuming process of developing a drug and getting it approved is the science supporting the drugs they're making (most importantly, their performances in clinical trials)

people claim biotech companies are all memes and there's no way to tell which ones will succeed because they don't understand the differences in how they're financed compared to most companies and that the science is the single most important thing when you're dealing with a biotech stock
the reason VTGN is "worth 3% of what they were in 2020" is because they issued more shares to raise money for clinical trials, making each individual share worth less money (this is called dilution)