And there it was, my first investment in a biotech company. At that time, I was actively searching for new investment opportunities on social media. My approach was as follows: first, identify 4 or 5 biotech companies that were trending. Then, conduct in-depth analysis, assessing their financial situation, pipeline, and future catalysts. Finally, find the right moment to buy them, at the best possible price. One of these companies was Trevena (TRVN).
Oliceridine, developed by Trevena, represents a groundbreaking approach to pain management compared to traditional opioid analgesics. One of its key innovations is its selective targeting of the mu-opioid receptor, which is the primary mediator of opioid-induced analgesia, while minimizing activation of other opioid receptors associated with side effects such as respiratory depression and gastrointestinal issues. This targeted approach aims to provide effective pain relief with reduced adverse effects, potentially offering a safer option for patients requiring opioid therapy for acute pain management, thereby mitigating the dependency effects associated with such treatments, such as those induced by morphine or fentanyl.
On September 26, 2018, I placed my first buy order for 1000 shares and immediately sold half before the market closed on account 1. So, I had 500 shares left at the end of the day. Providing a specific reason for selling those shares on the same day would be misleading as I don't exactly recall why I made that decision. Perhaps I made an error when placing the buy order, or maybe I just wanted to do more research before significantly increasing my position in TRVN.
Account 1
The next purchase of TRVN is scheduled for October 2, 2018, with the acquisition of an additional 750 shares. The objective now is to accumulate some shares before the ADCOM. An ADCOM, or Advisory Committee Meeting, for a drug is a gathering of medical experts convened by regulatory agencies such as the FDA (Food and Drug Administration) in the United States or the EMA (European Medicines Agency) in Europe. During an ADCOM, the committee reviews clinical trial data and other relevant information about a drug seeking approval for marketing. The committee discusses the drug's efficacy, safety, and risk-benefit profile and then provides recommendations or advice to the regulatory agency. While the committee's opinion is taken into consideration, the regulatory agency makes the final decision on whether to approve the drug for marketing. The ADCOM was scheduled for October 12, 2018. So, I found myself in a binary situation, holding 1250 shares of TRVN. It was either a success or a failure, I thought.
Account 1
The vote results during the ADCOM meeting were mixed. The committee voted 8-7 against the approval of Oliceridine, citing concerns about the risk of respiratory depression and potential abuse associated with the drug. Some committee members expressed uncertainty about the adequacy of the proposed Risk Evaluation and Mitigation Strategy (REMS) to effectively mitigate these risks. However, others supported the approval of Oliceridine, emphasizing its potential benefits in pain relief for patients with limited treatment options. Overall, the close vote reflected the complex considerations surrounding the approval of Oliceridine for managing acute pain.
Without hesitation, the stock price collapses. While the outcome of the vote doesn't definitively seal the fate of the drug's approval on the market, it still constitutes a significant vote of confidence. Although the FDA has occasionally approved drugs despite unfavorable votes during ADCOM, such instances were statistically rare. The stock, which had closed the previous day at $2.96, opened the next morning at $1.00, resulting in a drop of approximately 66%. Financial markets can be ruthless, and it's the stock price that bears the brunt of it.
At this point as an investor, there are three options: sell at a loss and move on, wait, or buy more shares if one still believes in the company. Personally, I maintained my conviction and believed that the FDA could still approve the drug, given the very close vote. On October 17, 2018, I decided to acquire an additional 3200 shares (2700 + 500). Similarly, on October 25, 2018, I purchased an additional 1790 shares.
Account 1
Account 2
Unfortunately, the FDA denied the approval of Oliceridine on November 2, 2018. The FDA issued a Complete Response Letter (CRL) to Trevena, stating that the drug could not be approved in its current context. The FDA's decision was based on concerns regarding the dosing interval between two successive administrations of the drug as recommended by Trevena. Additionally, the FDA requested additional data regarding certain aspects of the drug's safety profile, including the potential risk of respiratory depression. In summary, the FDA will not reconsider the approval of Oliceridine for the management of acute pain until the various issues raised are addressed.
TRVN's stock price plummeted to $0.71, putting my investment portfolio in a challenging situation. Despite the issues raised by the FDA, they seem surmountable, primarily involving missing data regarding patients' electrocardiograms. Communication with the administration takes time, but problem resolution is feasible. Faced with this situation, I chose to add to my position, making successive purchases as the stock price continued to decline. I made my initial purchases on November 14, 2018, and continued to do so on January 3, 2019, January 7, 2019, and January 22, 2019. Despite account fees forcing me to sell 50 shares, I managed to accumulate a total of 30,740 TRVN shares, with an average purchase price of $0.72, a significant decrease compared to the initial purchases at $2.56.
Account 1
Account 2
On January 28, 2019, a sense of relief washed over. Trevena announced it had received the official minutes from a Type A meeting with the FDA regarding the Complete Response Letter (CRL) for the New Drug Application (NDA) for Oliceridine. A Type A meeting with the FDA (Food and Drug Administration of the United States) is a scheduled meeting at the applicant's request to discuss a critical issue or problem concerning the development and review of a drug application. These meetings typically involve discussions related to issues that could have a significant impact on the development or approval of the drug. The purpose of a Type A meeting is to reach a mutual agreement on how to resolve the issue or problem promptly.
The FDA agreed to support labeling for a maximum daily dose of 27 mg based on the current safety database. Additionally, Trevena is permitted to conduct a study in healthy volunteers to collect the requested QT interval data. The company plans to submit a detailed protocol and initiate the study in the first half of the year. The resubmission of the NDA does not require additional efficacy data, which is a relief and saves significant time and resources for Trevena. The FDA requested non-clinical data support for metabolite characterization and product validation reports, which Trevena likely already possesses.
The renewed positivity led to a rise in the stock price, reaching a peak of $1.75. My main mistake was not selling my position at $1.75, which would have allowed me to realize a profit of over $30,000. Though significant, I hesitated to sell, hoping the stock price would reach $3 again.
On February 25, 2019, inadvertently, I purchased exactly 121 additional shares on my account 2. I couldn't explain why this specific number, likely a calculation error or leftover liquidity. Instead of waiting passively, with my initial position of 30,861 shares (30,740 + 121), I decided to experiment with day trading for fun. In other words, I attempted to buy and sell quickly with smaller positions to make small profits more regularly. On February 20, 2019, I bought 1500 shares, which I sold on February 25, 2019, generating a profit of +$100.07. I repeated the same pattern by buying on February 26 and selling on March 4, for an identical profit of +$100.07. I replicated the strategy on a third account, enabling me to make additional profits of +123.01$ on March 5, 2019, and +108.02$ on March 6, 2019.
Account 2
Account 3
Finally, I purchase 1500 more shares on account 2, deciding that this acquisition will further strengthen my long-term position, as I am unable to sell them quickly for a profit. The same scenario repeats with account 3, where the 3400 shares purchased on April 15, 2019, cannot be resold for an immediate gain.
In the end, I buy another 1500 shares on account 2, and I decide that these 1500 shares will be added to my long-term position due to the inability to sell them quickly for a profit. The same outcome is achieved with account 3 and the 3400 shares purchased on April 15, 2019, which I couldn't resell for a quick profit.
Account 2
Account 3
In June 2019, I made the decision to sell the majority of my Trevena shares. On account 1, this sale resulted in a profit of +$1873.65 (13,936.77 - 2,185 + 1,084.98 - 1,927.5 - 2,638.4 - 6,419.25 + 22.05). On account 2, the profit amounted to +$4529.86 (16,951.98 - 505 - 1,510.33 - 3,724.7 - 3,810.45 - 604 - 2,139.95 - 177.98 + 2,240.02 - 2,139.95 + 2,240.02 - 2,289.8).
Account 1
Account 2
Ensuite, j'ai persisté dans mes tentatives de réaliser des profits rapides en pratiquant le daytrading, en utilisant un nombre plus important d'actions, comme dans l'échange suivant qui m'a permis de réaliser un bénéfice de +109,82 $.
In September, I made the decision to reinvest in TRVN with a more substantial position, as the stock price was still below $1.00 and positive developments seemed to be on the horizon. On account 3, I also purchased an additional 1600 shares on September 19, 2019, to reach a total of 5000 shares, a round number.
Unfortunately, seeing that the stock price continued to decline and noticing other investment opportunities emerging, I decided to sell all my shares, resulting in a loss of - $3072.75 on account 3 (3574.56 + 6.16 + 6.16 + 6.16 + 239.02 + 3.04 – 1597.9 – 5309.95). On account 1, the losses amounted to - $3157.41 (10,202.24 – 4361.25 – 7322.45 – 1675.95). Additionally, I had also opened a fourth account where I made the same decision, further exacerbating the losses, totaling - $852.74 (1893.21 – 1189.95 – 1119.95 – 436.15). Time is money, and waiting for a stock to rebound risks missing out on other potentially more lucrative investments in the long run. It's a lesson to ponder.
Account 1
Account 3
Account 4
Outcome of the TRVN adventure: - $266.44
Account 1: $1873.75 – $3157.41 = - $1283.66
Account 2: $4529.86 + $109.82 = $4639.68
Account 3: $123.01 + $108.02 – $3072.75 = - $2769.72
Account 4: - $852.74
Moral of the Story:
Reflecting on my first solo venture into biotech investments, I gained valuable experience despite the mistakes made. As a beginner, I encountered numerous challenges, yet I also gleaned enriching lessons from this experience.
On the positive side, I learned to manage my emotions, a crucial skill in the investment world. It's tough to watch one's money slowly dwindle, but I learned to make rational decisions rather than react impulsively. After the ADCOM and the FDA's refusal to approve Oliceridine, I chose to add to my position as the issues raised didn't seem insurmountable. This decision proved right when the FDA ultimately accepted TRVN's submitted data in January 2019.
On the flip side, I realized the importance of taking profits when the opportunity arises. It's natural to want to wait for the stock price to rise further, but sometimes, it's crucial to know when to cash in gains. With a potential profit of $30,000, I should have sold and moved on, but I learned this lesson the hard way. A logical alternative would have been to recoup my initial investment and let the rest ride to capture a larger profit if the opportunity arose.
Ultimately, though my first investment had its ups and downs, it provided me with valuable experience that will serve me in my future investments. It's essential to acknowledge mistakes and learn from them to improve in the future.
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