The Best Defense For A Trade War? A Good Offense

Amid all the trade-related headlines these days, it’s easy to get caught up in the news and take your eye off the ball in terms of your overall investing strategy.


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Biggest Egomaniac On Wall Street?
This CEO flat out loves himself. For the past five years, he’s been buying his own stock like crazy, spending $97 billion to retire 57% of his company’s shares. Of course, that means MUCH larger dividend checks for the rest of us. But you need to see why he’s doing this… and why there is so much more to come.

Investors are right to be concerned about this new threat. After all, when a trade war is allowed to continue unchecked, the most likely impact is negative for virtually all involved parties.

#-ad_banner-#But I just recently told readers of my Game-Changing Stocks advisory that it’s still crucial for us to keep up with new developments — regulatory or scientific — that could define or impact the future of many industries.

One important development that many investors likely missed is the new guidance on gene therapy (GT) that was released July 11. Coming from the U.S. Food and Drug Administration’s (FDA’s) Center for Biologics Evaluation and Research (CBER), the documents offer a close look at how the regulators view the future path for this young and promising industry.

According to the FDA, “Such information is intended to assist sponsors in designing clinical development programs for such products, where there may be limited study population size and potential feasibility and safety issues as well as issues relating to the interpretability of bioactivity/efficacy outcomes that may be unique to rare diseases or to the nature of the GT product itself.”

Translation: Because rare diseases are, well, rare, biopharma companies can only run small studies and need special permission to do so. This new regulation, in effect, gives this permission.

Six guidance documents focus on developing solutions to treat hemophilia, rare disease and retinal disorder gene therapies. For rare diseases, the guidance provides recommendations for manufacturing, preclinical, and clinical trial design steps of developing a GT product intended to treat a rare disease.

We’re Already Profiting From Innovative Gene Therapy Technology
In our Game-Changing Stocks portfolio, gene therapies are represented by Sarepta Therapeutics (Nasdaq: SRPT). This innovator uses RNA therapies in Exondys, the only FDA-approved drug to treat patients with Duchenne muscular dystrophy (DMD), a rare and fatal disease. (DMD impacts only young boys, and the number of boys afflicted is estimated at 10,000 to 15,000 in the United States.)

The FDA’s new guidance is a positive development for Sarepta, as the company is conducting clinical trials for a new DMD therapy, microdystrophin, which should be able to qualify for accelerated approval.

If you’re a Game-Changing Stocks subscriber, that means you were able to get in on this pick when I initially recommended it in October of last year.

Hopefully, you were not disheartened by Sarepta retreating from its all-time high of $176.50 set in mid-June. Even though the stock is down some 23% from that intra-day high, the shares are still up almost 150% year-to-date — and as of this writing, we’re up a total of about 163%. And I believe SRPT has much more room to run.

While, at first glance, the 23% decline in a month might seem massive, that’s really not the case. That’s because SRPT, propelled by a fantastic performance of its new gene therapies in a clinical study, had jumped as much as 68% when the news of its clinical successes was released. And at the end of that big news day, the stock was up a whopping 37%.

This is a buying opportunity. Sarepta — which has been a pioneer in both treating the Duchenne muscular dystrophy and in developing gene therapies — has a bright future.

Just look at the results from the clinical trial that recently sent the shares soaring. Not only has microdystrophin showed an unexpected robust increase in the level of muscle-making protein, but this new treatment can potentially help many more patients than Exondys already does. That’s because Exondys works for one very specific gene mutation, a mutation that only happens in about 13% of all DMD sufferers. Microdystrophin, by contrast, could benefit up to 65%-70% of boys with DMD.

Sarepta’s gene therapy treatment for DMD just received the FDA’s orphan drug designation. This means that this drug, if approved, will be granted a seven-year exclusivity. Sarepta is also working on gene editing, the ability to make highly specific changes in the DNA sequence of a living organism. That work is part of its pipeline of new promising drugs.

Because of the strong advances it has made in the area of gene therapies and gene editing and based on its colossal game-changing potential, I can also see Sarepta as a viable acquisition target. I’m keeping my “Buy” rating on SRPT.

Why This Matters
The main goal of Game-Changing Stocks is to find companies uniquely positioned to benefit from creating or applying new and unique technologies. This means that our portfolio holdings, by and large, will march to the beat of their own drums.

Of course, I don’t mean to imply that they are immune to the overall market trends, or that all of these companies will take economic challenges in stride. That is definitely not guaranteed to be the case.

But companies that own leading technologies poised to address growing problems or previously unaddressed diseases are the ones that have more than a fighting chance even if the economy starts to go downhill. They can continue to grow where others falter.

My goal is to find as many of these innovators as possible and to help my subscribers make money from those finds. This does not mean that we will hold onto every single position forever. Extreme turbulence, a change in the company’s story or, frankly, a strong accumulated profit in our position could prompt me to sell. But the more of the true game-changers we own, the better will be our odds of profiting over the long term.

There’s another reason these companies are poised to do well: Smaller-cap game-changers — the ones we tend to own in Game-Changing Stocks — can be excellent takeover targets for larger, slower-growing companies.

You cannot hide from market turbulence by investing in game-changers (which are, as a rule, even more volatile than the market). But these are the stocks you want to own for a long haul, and they are much more likely to bounce back quickly. After all, even Amazon (Nasdaq: AMZN), Netflix (Nasdaq: NFLX) and Apple (Nasdaq: AAPL) didn’t make it to their current highs without setbacks — both in their businesses and share prices.

Take my advice: If you aren’t already a Game-Changing Stocks subscriber, then consider a risk-free trial. You’ll get access to our latest report — The List: 7 Growth Stocks You Need To Own Now — whether you decide to stick with us or not.

The picks contained in this report just might be your best shot at weathering any turbulence the market throws at you. These are stocks that will march to the beat of their own drum. They’re not traditional “defensive” picks by any means, but the best defense is a good offence. They all have triple-digit upside — and more. To learn more about this report, go here.