Cramer: Secret pattern to unlocking biotech riches

Biotech gains attainable?
Biotech gains attainable?   

Jim Cramer has picked up on a pattern when it comes to biotech stocks that could change the game for an investor's portfolio—listen to the darned CEO interviews.

In fact, Cramer would argue that the biotech group has gone from being hit or miss to being totally predictable just based on what the CEOs are saying on "Mad Money."

For instance, BioMarin racked up a 12 percent gain after a successful trial of a drug that combats dwarfism in children. The results of the trial triggered price target bumps from all of the research houses that follow the stock.

Cramer was shocked when he saw this. Not because of the results of the study, but the fact that these results seemed to be much of a surprise in the first place. BioMarin CEO J.J. Bienaime said many times on the show that things looked good for this test and that he was hopeful. And while his demeanor came across as understated and nonpromotional, these results should have been no surprise to anyone who watched "Mad Money."





Biotech
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Then there was the time Robert Ward, the CEO of Radius Health, spoke with Cramer and confirmed that one of its drugs seemed to be causing a solid reduction in broken bones, which can be a life or death issue for the elderly.

Sure enough, on Thursday investors learned that Radius' clinical trial showed a dramatic reduction in broken bones. And while the stock was up 15 percent on Thursday, it is up 56 percent since that interview alone.

But the stock that really had Cramer confused was Allergan. How could that stock have failed to rise based on its very smart bid for Kythera Biopharmaceuticals?

Kythera is the maker of the injectable drug that works to combat double chins. Allergan already dominates the market to offer Botox to dermatologists all over the country, so it seemed like a no-brainer for Cramer that Allergan's salespeople could easily add Kythera's drug into the mix when they make the rounds for Botox.

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"I couldn't believe that people failed to realize how additive Kythera will be to the toolkit of the Allergan detail person," Cramer said.

But most importantly, when looking back at all of these CEO interviews, Cramer saw a pattern. A pattern that revealed that all of these gains are attainable for your portfolio, but require a specialized skill: Listen to the CEOs!

The CEOs are not wasting your time, Cramer's time or their own time. They are helping investors to learn about their products so you can make money—it's that easy.

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