As investors plowed into financial and housing stocks in the last few years, they forgot about the pharmaceutical industry, says Jim Nelson in Penny Sleuth.

But now that the party is over, biotech stocks are coming back in a big way. According to mutual-fund research firm Lipper, two biotech funds were amongst the top five best-performing vehicles in July – a dramatic reversal from June when commodities funds were leading the charge.

Big Pharma is buying up promising biotech companies in an effort to boost profit margins. This creates great opportunities for investors, and it’ only just the beginning…

The coming together of nanotech and biotech could resurrect the pharmaceutical market, says Patrick Cox in Penny Sleuth.

By using nanotech structures to modify existing drugs, small-cap pharma companies can sidestep the hefty costs and risks of new drug approval. This has traditionally been a major barrier to entry for start-ups. More importantly, early research has shown the altered drugs to be extremely effective against a broad range of serious diseases.

As new ventures approach IPO, they will create great investment opportunities. More from Patrick…

Is it finally time to invest in stem-cell technology? Tech junkie Patrick Cox, writing in Penny Sleuth, thinks so.

The FDA recently banned stem cell company Geron Corporation (NASDAQ:GERN) from going ahead with trials of its spinal-cord therapy. But great transformational investors have always bought when the public has given up hope on new technologies.

It now looks like there might be a breakthrough in heart failure prevention, says Patrick. Although they won’t go on the record about it yet, leading researchers expect a breakthrough to occur in the next five years…

Swiss drug company Roche (OTC:RHHBY) may not get its hands on San Francisco-based biotech outfit Genenetech (NYSE:DNA) as quickly as it had hoped.

Genetech has formed a special committee of independent directors to evaluate the $89-a-share acquisition offer from Roche, which already owns 56 percent of the US biotech firm.

If the deal does go through it may be bad news for Roche and Genentech shareholders, according to Phase 1 Investor editor Rob Fannon in The Growth Stock Wire. But it would be good news for the biotech industry as a whole…

While I believe the bid is a bad move for Roche – and not a great proposal for Genentech shareholders – this mega-deal is actually good for the entire biotech industry… and its investors.

With Genentech…

Another strong play from medical stock expert Rob Fannon.

Rob says that although Big Pharma stocks are cheap right now – bellwether Pfizer (PFE) is cheaper than it’s ever been – drugmakers are racing off the side of a cliff.

This is because when patents expire drugmakers loose billions of dollars to generic manufacturers.

But biotech drugs can’t be copied easily. And the sector is in an uptrend. Rob recommends using a biotech ETF to play this trend.

Big Pharma is in trouble. Generic competition, patent expirations and slowing sales are all eating into profits.

So how can you turn a profit in this turbulent sector? By investing in contract research organisations, or CROs, says biotech expert Rob Fannon. When the big pharmaceutical companies outsource research to CROs they get paid whether or not the new drugs ever make it to market.

There’s another way to profit too – contract sales organizations, or CSOs. They’re another way for Big Pharma to outsource, but instead of doing research they sell.

Biotech, one of the most speculative sectors is “acting well” right now, says Brian Hunt. The Powershares Biotech ETF (PBE) has held steady while the market collapses around it. When the broader rally comes make sure you are in biotech…

Editor’s Note: Investors kill biotech stocks when the Food and Drug Administration (FDA) doesn’t approve a new drug. You can take advantage of Mr. Market’s overreaction and pick up good companies for cheap when this happens, says Dr. George Huang, editor of new Stansberry Research trading service the S&A FDA Report.

Editor’s note:  Is it time to consider Pfizer as a serious investment? Let it slide lower first, says Charles Delvalle.