Basic idea of investing in biotech:
1. Find company with good science (both scientific literature and clinical trial results) supporting its drugs and trustworthy management (experienced, credentialed)
2. Make sure the company has enough money to fund clinical trials by checking SEC filings (if not, keep in mind that dilution will be required unless the company has or finds an alternative means of funding such as a partnership, possibly use diltuion as opportunity to buy ~3-4 days after offering is completed)
3. Consider your timeframe (how long you want to be holding the stock) and what your price target is beforehand
4. Keep track of upcoming catalysts (clinical trial results/FDA approval (if the company has already passed phase 3) are the most important by far, but also pay attention to things like FDA fast track/orphan drug/breakthrough therapy designations and presentations at conferences
5. FDA approval is the "endgame" of a biotech company, but you can make a ton of money just finding a company that does well in clinical trials and then taking profits

Basic biotech terminology:
>Catalyst - an event that is likely to have a significant effect on a company's share price
>Pipeline - the drugs/drug candidates a company is selling or developing
>FDA - the government agency that oversees the approval of new drugs and sets the standards of compliance for clinical trials
>Indication - a disease that a biotech company is attempting to make a treatment for
>Clinical stage company - a company with a pipeline that is still in the process of undergoing clinical trials, has not yet brought a drug to market
>Fast track status - an FDA designation intended to expedite the development and review of drugs that treat serious diseases and could fulfill an unmet medical need
>Orphan drug status - an FDA designation intended to advance the development of drugs to treat rare diseases that don't affect enough people for sales to be profitable relative to R&D and marketing costs
>Breakthrough therapy status - an FDA designation that allows priority review of a drug whose clinical trials indicate it could offer a significant advantage over existing treatments in patients with serious or life-threatening diseases
>Clinical trials - scientific studies a company carries out to make sure a drug is safe and works
>Commercial stage company - a company that has already completed clinical trials and has one or multiple drugs that can be marketed and sold
>NDA - New Drug Application, a form filed with the FDA to request approval of a drug
>CRL - Complete Response Letter, a form given to a company by the FDA telling them that their NDA was denied and explaining why

Biotech news/DD/educational sources:

https://www.biopharmcatalyst.com (to screen stocks and learn about upcoming catalysts)
https://clinicaltrials.gov (for reading about a company's clinical trials)
https://www.ncbi.nlm.nih.gov (for looking up scientific literature)
https://endpts.com (news site)
http://www.cafepharma.com (news site)
fintel.io (for SEC filings)
http://martinshkreli.com (Martin Shkreli's blog)
https://www.youtube.com/channel/UC8gjB1PSXv_oAUSAQ16S0fA (Martin Shkreli's Youtube channel)

Biotech phases:
>Discovery (the stage in which a company attempts to find/create a drug that could potentially treat a given disease)
>Preclinical (animal trials intended to assess the toxicity and adverse effects of a drug candidate, intended to make sure it doesn't kill everyone in Phase 1 trials)
>Phase 1 (the first stage of human clinical trials, carried out using a relatively small number of healthy volunteers to determine safety and side effects, as well as how much of it is safe to give as a dose)
>Phase 2 (clinical trials carried out to assess the efficacy of a drug candidate
>Phase 3 (clinical trials intended to definitely confirm the efficacy and safety of a drug, carried out using a large number of patients over a period of multiple years)
>Submission of NDA (when a company has finished clinical trials and attempts to get a drug approved by the FDA - if the NDA is accepted, the drug is approved and can be sold to people)
>Marketing (when a company actually begins to sell an approved drug to people)
>Phase 4 (clinical trials conducted after the drug has been approved and brought to market, intended to assess long term effects and other aspects of treatment such as cost and quality of life)

Other things:
>Biotech is an inherently speculative sector because the success of a company depends largely on the outcomes of clinical trials, but if you do your research, stay patient and disciplined, and make informed decisions, it can be much more reliable and lucrative than gambling.

>Only 10% of drugs that undergo clinical trials are eventually approved, underscoring the importance of doing thorough research and making informed decisions.

>Biotech companies, especially small ones, are volatile as shit, be prepared to hodl and don't freak out over short term price action if there isn't an actual reason for it.

>Earnings are generally non-events for small clinical-stage biotechs, since almost all of them operate at a loss during the R&D stage, but sometimes a biotech company might announce some other kind of PR at earnings.

>Things that decide if a drug will be approved by the FDA: Safety profile (how bad its side effects are), clinical efficacy (how well it works), these things relative to its competitors (if there are any).

>Small biotech companies generally have no money, but can be valuable because of the potential their intellectual property (pipeline) has. Large biotech companies have a lot of money, but often struggle to find new sources of profit (drugs). It's common for large biotechs to add to their pipelines by buying smaller biotech companies that have shown promising results in clinical trials.