Are Biotechs Worth The Risk?

Investing in stocks of emerging biotech companies is a tough way to make money. The biggest risk, of course, is the arduous and expensive process of getting a drug through the FDA clinical trial process -- a gauntlet that only a small percentage of drug candidates survive. A nasty setback for a late-stage drug can often cause a biotech stock to lose half its value in a heartbeat. But even for those companies that succeed and get multiple drugs to market, a decent return for shareholders willing to shoulder the risk isn't a foregone conclusion. I've learned this lesson from personal experience, and I'm going to share it with you today.