Our Stock of the Week is LianBio (LIAN). LIAN is a small biotechnology company, but it has a powerful business model and substantial institutional support.
The LIAN model is to partner with companies that are obtaining US approval for various drugs and then bring those drugs to China and other Asian markets. Unlike other biotechnology companies, LIAN does not have the same degree of risk if a drug fails to gain approval in the US. If the drug is approved in the US, then there is a much greater chance that it will be approved in China.
LIAN has partnered with Bristol Myers on a drug for obstructive hypertrophic cardiomyopathy that was approved on April 29. LIAN is now moving through the approval process in China. There is a potential market value here of over $15.8 billion.
LIAN has also partnered on drugs with BridgeBio for cholangiocarcinoma, with Landos Biopharm for ulcerative colitis, and with Tarsus for Demodex mites.
LIAN is more than 50% owned by Perceptive Advisors, which brought the company public and has added to its position at a higher price. Its most recent buy was 120,000 shares at $2.63 on May 25, 2022. Perceptive has been highly supportive of the stock since it came public.
Technically, LIAN has been in a trading range for several months and is now testing the upper end of the range around $3. There is still some concern about how the COVID lockdown is impacting development in China, but the biotechnology sector has improved nicely in the last six weeks, and LIAN still looks like a relative value.
As always, we would not chase the stock on Monday morning but will aggressively trade it as it develops.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and will buy or sell at any time for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in LIAN To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.