I still believe there is exceptional growth potential in some of the smaller pharmaceutical companies if you find the right one. What is your experience of small pharmaceutical groups? Have you made money?
The companies representing this industry offer outstanding trading opportunities. As usual, they are small companies working on innovative products. If their research would be successful, they would be able to receive approval from the FDA (Food and Drugs Administration, the US regulating agency) or from EC (European Commission, the EU regulating agency) depending on the market they are interested in. Asthe result, the price could grow substantially (sometimes 3x or even more due to the low float). At the same time, it is important to understand that if the product they are working at fails to meet the expected efficiency results, the price could fail almost to zero because the value of such company depends mostly on products and expectations regarding them. That is why such investments could be very risky - just take a look at OHRP - its price felt from $2.00 to nearly $0.20 after failure with their main product. That is why you should understand that risk is often equals to 100% of your initial investment. So, investing in biotech and pharmaceutical companies could be very profitable, but it is always associated with substantial risk.
I think you need to have a basket of different companies when investing in what are really the most risky, but potentially rewarding, shares on the market today. One hit wonders can be reduced to zero or they can fly to the moon. However, there are loads of factors to consider, some out of the company's control.